BizJournals Portfolio

War, Peace, and Patents

Patent Pending for Software Claims

Acquiring, using, and defending software patents has become big business—sometimes playing a vital role in a company’s success. But that could all change if the Supreme Court decides software can no longer be patented. Read More

Patent Potentate Patent Potentate

With his latest patent in hand, an 88-year-old inventor has set a record. He's been earning patents longer than anyone, including Thomas Edison. Read More

Follow Microsoft Inc. Follow Microsoft Inc.

Keep track of what's happening with Microsoft or any one of thousands of other U.S. companies by using BizWatch, Portfolio.com's unique and free aggregation tool. Read More
PREV 2 of 2

The shift in mentality has been particularly evident at Microsoft. Phelps, who left Microsoft last fall but continues to advise the company, recalled that Microsoft had only one patent cross-licensing deal on the books when he joined the company, and it had expired. But since launching its intellectual property licensing program in 2003, Microsoft says it has entered into more than 600 technology licensing deals.

Microsoft has simultaneously amassed a huge patent portfolio of its own. With more than 2,900 assigned patents last year, the company was the No. 3 patent recipient in the world, behind only IBM and Samsung, according to an analysis published by IFI Patent Intelligence, a patent information firm.

Unlike IBM and other companies that make huge sums on their patents, Microsoft has said its decision to launch a licensing program in 2003 was more about protecting the company’s interests and collaborating with others in the industry. However, the initiative has also proven divisive, highlighting the company’s assertions that Linux and other open-source software technologies violate its patents.

That was evident in the announcement of the Amazon.com cross-licensing deal. In a news release, Microsoft made a point of noting that the pact covered Amazon for its use of technologies including Linux servers and open-source components of its Kindle reader. Some open-source software advocates saw that statement as more evidence of Microsoft attempting to create uncertainty about Linux, which competes with Microsoft’s Windows operating system.

A few days later, Microsoft struck a patent deal with Panasonic, and on March 3 announced yet another agreement, with I-O Data Device Inc.

Large patent aggregators such as Intellectual Ventures, founded by former Microsoft exec Nathan Myhrvold, are also playing an increasingly prominent role in the tech industry. Intellectual Ventures has acquired a huge pile of 30,000 patents from individual inventors, universities and businesses, which it turns around and licenses to tech companies (leading some critics to label it a patent troll that extracts payments without actually producing anything).

More recently, the firm has shown interest in opening its vast patent library to firms that are building a defense against litigation. Intellectual Ventures’ patent sale to Verizon helped the company build a counterclaim against TiVo, which is suing the wireless giant for patent infringement over its use of “time-shifting” technology for recording and later playing back video content in its FIOS television service.

“We’re continuing to see the growing evolution and legitimacy of the IP trading market,” said Ron Epstein, CEO of IPotential LLC, a patent brokerage, and former director of licensing for chip giant Intel. “Patent purchasing has become absolutely an accepted and required part of portfolio development strategy.”


Eric Engleman writes for TechFlash, the Puget Sound Business Journal's technology blog. Todd Bishop is managing editor of TechFlash.

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

Connect With Portfolio.com

Come on, like us—you know you want to.

Follow us and if you're an innovative entrepreneur, we'll return the favor.

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

People & Ideas

Whisky To-Go-Go

Now there's a company that let's you taste your knowledge of fine blended Scotches by mixing a whisky of your own. Read More