Yahoo is selling 2600 patents – what can we learn about them?
Yahoo is putting up a portfolio of 2659 of its patents up for sale, and is accepting bids at the moment. Price expectations are up to 1 billion dollars.
2659 is a lot of patents by any measure, and this would stretch the resources of any patent analyst. However here at Ambercite, we have developed some powerful tools such as Cluster Searching to help these analysts, and so we were curious to explore this portfolio ourselves. In particular, we were wondering:
- Of these 2659 patents, which were the best – and what sort of subject matter did they claim?
- Which companies owned the most similar and important patents?
- If a prospective buyer missed out on this portfolio – what are the similar patents they might consider buying?
How we did it
We used our Cluster Searching patent searching tool, using the following process:
- We obtained the full list of patents from an assignment filed by Yahoo at the USPTO to move these patents to new company set up to own these patents, Excalibur IP LLC.
- We entered these patent numbers 200 at a time into Cluster Searching, and downloaded reports of their AmberScore values. AmberScore is our prediction of patent importance based on its citation density
- We enter a list of the 200 patents with the highest AmberScore values into Cluster Searching, and ran a query for the most 2000 similar patents to these 200 patents, that were filed after June 1996 – and we were excluded the Excalibur patents from these results.
- We identified the owners of these patents with the highest total licensing Potential
- We also reviewed the individual patents with the highest individual potential., that were not owned by major companies and so potentially available for acquisition by other companies who might want to get into the same space.
This took about 30 minutes or so
What are the best patents in the list of patents to be sold?
This was assessed by our metric AmberScore, which considers both forward and backward citations, and related citations. AmberScore has been normalised so that the average for granted US patents is 1.0 – so anything above 1 is above. In any reasonably sized portfolio we would expect a range of AmberScore values, and there is nothing wrong with this.
Regardless, the top scoring patents are likely to be much more valuable than lower scoring patents. The top ten list is shown below. Perhaps not surprisingly, the list is dominated by patents linked to searching and internet advertising.
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We can also consider the full range of AmberScore values, as shown in the table below. The above table showed that only 4 patents had AmberScore value greater than 20, and only a further 34 had AmberScore values greater than 10.
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As discussed above this sort of distribution is not surprising, and we have seen similar distributions for the full portfolio of patents filed by Apple, Microsoft and Google – but does it does suggest two implications:
- The vast majority of patents in this portfolio, like any large set of patents, may have limited values
- Conversely, only a few patent will have high values – which places an responsibility on any likely purchaser to identify the high value patents and focus on these.
- The history of purchases of large patent portfolios should confirm this thesis. The Nortel patent portfolio was famously bought for 4.5 billion in 2011, and then realized only about 1 billion in value. Around about this time Ambercite released an analysis of smartphone patents, and Nortel failed to make the list of the top ten patent owners in this space. So personally I was not surprised to see these patent realize less value than expected at the time.
Who owns the most similar patent portfolios?
This can be assessed by looking for similar and important patents, in comparison to the top 200 patents as assessed by AmberScore. This can be determined by our Licensing Potential metric, which predicts the potential for a licensing relationship for a later filed patents. A higher value suggests a greater potential, and if a patent owner has more than one patent in this list, these Licensing Potential values can be added together.
So who were the companies with the greatest Licensing Potential?
The top 10 companies are shown below. Perhaps not surprisingly Google heads this list. Yahoo itself was second on the list – note that these are patents not being sold as part of the Excalibur transaction.
Perhaps more surprising is the role of Millennial Media. Not all of us have heard of them, but Millennial Media describes itself as “the leading mobile ad marketplace, making mobile simple for the world’s top brands, app developers, and mobile web publishers.” Millenial Media was acquired by AOL in late 2015.
The rest of the owners are well known in the field. But this does raise the question – of the patents in the list of similar patents with the highest Licensing Potential, which of these are owned by smaller companies who might be more open to selling them? This is covered in the next section.
If a prospective buyer missed out on this portfolio – what are the similar patents they might consider buying?
We answered this question by considering the similar patents with the highest Licensing Potential, and which were not owned by major IT companies. As you would expect the full list is a lot longer than this, but this gives a taste of what is possible.
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We expect that these patents could be of interest to companies looking to build up an ownership position in this space, but without the capital to buy the whole of the Excalibur portfolio. There are a wide range of owners on this full list, providing plenty of options for potential acquirers.
Like to know more?
Please contact us for further information, or for details on how you can conduct your own analysis on your own set of patents
