Facebook Has To Waste Money On 750 IBM Patents Just To Ward Off Other Patent Lawsuits

from the play-the-game,-waste-money dept

It's been a pretty open secret for quite some time that Facebook is actively in the market to buy a bunch of patents, and now it's done its first big deal, scoring 750 patents from IBM to add to the 56 patents it currently has (some of which it purchased, and some of which it applied for). There's been plenty of talk about people who don't really know much about patents about how Facebook "needs" more patents, and the ridiculous Yahoo lawsuit only increased the attention the issue is getting. Plus, there are some investors who still -- for whatever reason -- think that the number of patents in a portfolio are a reasonable proxy for innovation or the ability to control a market. Of course, none of these patents will help Facebook against its most common legal foe: the patent troll. They're really only useful either against other operating companies (to ward off patent nuclear war cross-suits) or if Facebook decides to become obnoxious like Yahoo and start suing others offensively.

What this really shows is just how broken the patent system is. Facebook basically just had to waste a large chunk of money on a bunch of patents that have nothing to do with innovation, which won't help Facebook provide a better product for its users and which will only serve to create more money for lawyers somewhere down the road. That's not a healthy system. That's not an efficient system, and it's not one that's good for innovation or economic growth.

Filed Under: defense, inefficiency, patents, waste
Companies: facebook, ibm, yahoo

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. identicon
    Anonymous Coward, 23 Mar 2012 @ 7:03am


    Just one man's view, but to me Facebook is already well down the path of becoming a "legacy" in a relatively short time. So that one understands what I mean by "legacy", I have found over many years of dealing with all sorts of companies, big and small, that an IPO is one of the first steps down that path. "Shareholder ROI" begins the inexorable march from "quick and nimble" to "we have to meet quarterly projections".

    Now, whether or not this means FB will start looking at weilding patents as a sword remains to be seen. After all, look at IBM, possible the largest holder of patents in the world. While on rare occasion it has proceeded against other companies using in part patents, their patents generally sit on shelves for possible use in those rare instances.

    I can only speak for myself, but I have never advised a company to secure patents just because it has come up with something "nifty". Rather, I have encouraged them to look at their long range plans for introducing in the future new products and services. If the invention is a critical aspect of such products and services, then is would seem to be a good candidate for a patent. Otherwise, it is merely a nice to have, but one that diverts financial resources from other beneficial uses. I have likewise always encouraged them to continually review their patent activities to determine if any activities relate to products and services that have fallen by the wayside and have no relevance to such products and services. If it becomes clear that they are no longer relevant, then either abandon associated activities, or in a very few instances make it available to others as to whom it may be relevant and useful.

    In other words, portfolio building should never be the goal. Pertinency to long range business plans should be the relevant criteria, and if that means stopping further activities on the irrelevant then so be it.

    By this measure, fire sale purchases of someone else's work embodied in patents is a fool's bet. It is little more than purchasing a "grab bag" with little thought if what is hidden in the bag is even relevant.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Show Now: Takedown
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads


Email This

This feature is only available to registered users. Register or sign in to use it.