{"id":814,"date":"2012-06-30T21:47:07","date_gmt":"2012-06-30T21:47:07","guid":{"rendered":"http:\/\/ncjolt.org\/\/?p=814"},"modified":"2020-06-04T20:54:08","modified_gmt":"2020-06-04T20:54:08","slug":"facebook-purchases-750-patents-from-ibm","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/facebook-purchases-750-patents-from-ibm\/","title":{"rendered":"Facebook Purchases 750 Patents from IBM"},"content":{"rendered":"
Monday, April 2nd 2012 by\u00a0Andrew D. Hennessy-Strahs<\/strong><\/div>\n
\nUpon learning that facebook has reached a deal to purchase 750\u00a0patents<\/a>\u00a0from IBM, I initially rolled my eyes and assumed this is just another bit of facebook trivia \u2013 after all, I am sure most of us are still eagerly waiting for that facebook phone.\u00a0 Then, I started asking questions.\u00a0 Is it common for internet companies to do this?\u00a0 What do other company\u2019s patents do for a company,\u00a0not to mention 750 of them?<\/em>
\n\"\"
\nAfter doing a little bit of research, I started to understand that this is a rather common practice for successful technology companies.\u00a0 It is much like buying utilities in Monopoly.\u00a0 Players hope that (1) someone lands on one of the Utilities and (2) once another player does, he pays more rather than less for doing so.\u00a0 Purchasing patents is speculative.\u00a0 The patents themselves are worthless until someone uses the patent to develop a technology.\u00a0 The catch, however, is that \u201ctechnology\u201d is a rather nebulous concept.\u00a0 The iPhone, for example, is a complex system of patents; Apple filed over\u00a0200 patents<\/a>\u00a0on the first iPhone alone.\u00a0 Because patents can apply to\u00a0any technology<\/a>\u00a0that is merely \u201cuseful,\u201d including software, methods, processes, and machines, there is a natural incentive to patent even the smallest bits of technology, even if those technologies have not yet been integrated into a larger more useful form (e.g., an iPhone, or an iPhone application).
\nIf a company ever incorporates the technology, for which there is an outstanding patent, then the patent holder can now sue for patent infringement and collect a licensing fee, much like the player in Monopoly, who happens to own \u201cWater Works.\u201d\u00a0 The entire practice is pejoratively referred to as \u201cpatent trolling<\/a>,\u201d because the companies that collect these patents function much like the trolls in some fairy tales that guard bridges and charge a fee for those who wish to continue their journeys.\u00a0 These licensing fees, in turn, provide a\u00a0disincentive<\/a>\u00a0to innovate \u2013 a disincentive that looms heavy for small technology firms with shoestring budgets but great ideas.<\/p>\n

” Purchasing patents is speculative. The patents themselves are worthless until someone uses the patent to develop a technology. The catch, however, is that \u201ctechnology\u201d is a rather nebulous concept.”<\/p><\/blockquote>\n

Curiously, the reasons behind facebook\u2019s purchase\u00a0 are probably more closely related to a pendinglawsuit<\/a>\u00a0brought by Yahoo!, in which Yahoo! alleges that facebook infringed ten patents in the development of its social network.\u00a0 In several of its allegations, Yahoo!\u00a0alleges<\/a>\u00a0that facebook used patents for enhancing the security of its online advertising.\u00a0 In another\u00a0allegation<\/a>, Yahoo! claims that a patent covering \u201ccontrol for enabling a user to preview display of selected content based on another user\u2019s authorization level\u201d was breached when facebook created its \u201cView As\u201d feature.
\nA judge must decide whether the breadth of Yahoo!\u2019s patents entitles the company to compensation from facebook for using these patents.\u00a0 Facebook, which held only\u00a056 patents<\/a>\u00a0prior to the deal with IBM, is trying to fight this current lawsuit much like a chess player would by simultaneously\u00a0mounting a defense and counterstriking<\/a>.\u00a0 The deal with IBM will enable facebook to allege that both Yahoo! and facebook hold patents which cover the same territory, thereby negating Yahoo!\u2019s infringement claims.\u00a0 Presumably, facebook and Yahoo! could remove the issue from the table or enter into a cross-licensing agreement, in which they both \u201cpatrol the same bridge,\u201d so to speak.\u00a0 Facebook also wants to pressure Yahoo! into dropping the lawsuit or settling outside of court by countersuing Yahoo! for patent infringement on the newly acquired IBM patents.\u00a0\u00a0 Naturally, facebook has become a stronger \u201cchess player\u201d as its newly acquired arsenal of patents can stave off \u2013 and possibly initiate \u2013 future lawsuits in the same fashion.\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Monday, April 2nd 2012 by\u00a0Andrew D. Hennessy-Strahs Upon learning that facebook has reached a deal to purchase 750\u00a0patents\u00a0from IBM, I initially rolled my eyes and assumed this is just another bit of facebook trivia \u2013 after all, I am sure most of us are still eagerly waiting for that facebook phone.\u00a0 Then, I started asking …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/814"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=814"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/814\/revisions"}],"predecessor-version":[{"id":7711,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/814\/revisions\/7711"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=814"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=814"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}