M·CAM

News has been circulating that AOL, Inc. is looking for buyers or licensors of its patent portfolio. One of AOL’s top investors has suggested the portfolio is worth, if “appropriately harvested,” more than $1B in licensing income alone. Prospective buyers of the AOL portfolio should remember that Google paid $12.5B for a patent portfolio that has 48% potential commercial impairment. In this case, 71% of AOL’s U.S. patents have potential commercial impairment.

On March 12, 2012, Yahoo! filed a patent infringement suit against Facebook. In the complaint, Yahoo! alleges that “Facebook's entire social networking model … is based on Yahoo!'s patent social networking technology.” A bold statement, since all but one of the asserted patents underwent extensive claim amendments AFTER Facebook was incorporated in 2004. What does this mean? It means the asserted Yahoo! patents have the dual benefit of a pre-2004 application date and a post-2004 visibility into technologies that Facebook had already reduced to practice.

The FBI is investigating 120 alleged cases of insider trading. During our research into this week’s hot topic of who really owns social networking – Amazon, Facebook, or Yahoo! – we reported that a consulting company holding patents in the social networking / e-commerce space – patents that clearly impact the future business of Goldman’s darling, Facebook. In the knowledge economy, how do traders, consultants, and other professional services selectively use information gained from clients or partners without tripping over ethical and legal obstacles?

On February 16, 2012, Intellectual Ventures (“IV”) launched its seventh patent infringement suit, this time against AT&T, Sprint Nextel, and T-Mobile . In a familiar pattern, all but one of the patents in the suit were assigned to what appear to be IV “shell” companies before their most recent assignment to Intellectual Ventures by name. To IV’s chagrin, all three defendants control significant intellectual property estates in the technology space of the asserted patents; AT&T alone owns almost 500 properties that predate the patents being asserted against them.

Following Facebook’s February 1, 2012 filing for an Initial Public Offering, the market is wondering if Facebook’s quest for public status will paint an even bigger patent litigation target on its back. Is Facebook’s $100 billion valuation protected? Facebook itself certainly doesn’t seem to think so. After all, over 65% of Facebook’s portfolio was originally issued to other entities (e.g., they were NOT the source of innovation).