Is Yahoo’s Patents Portfolio Really Worth $4 Billion? No Way!
Published on 16 May, 2016
Any news of Yahoo’s auction is almost always rife with frenzied conversations about the worth of its patents portfolio. We, however, not only see a definite high risk to bet on a large volume of the patents, but also wonder if any valuable patents are really left in the portfolio after Yahoo’s patents sales to other tech giants over the last three years.
Post announcements of Yahoo’s patent portfolio being up for grabs, IP experts and media are rife with speculations regarding the portfolio’s worth and how this once -tech giant’s patents will affect the industry. There are a few (very justified in their views!) who fear Yahoo, going by the ‘Starboard’ incidents, might play the role of a major patent troll.
To begin with, AIA and Alice practically grounded the uptrend of patent market prices - it’s very doubtful when one declares their patents worth at $4 billion. Can the portfolio be really that valuable?
Out of the 2000 odd currently active US patents that Yahoo owns, about 70% are classified under software based on USPTO classifications and about 15% under business methods. With the current success rates that petitioners are experiencing at the PTAB, this leaves about 85% of Yahoo’s portfolio exposed to severe invalidity threats. It is very difficult to estimate the validity strength of the patents unless a potential buyer actually checks it as Yahoo has rarely litigated its patents. It is a definite high risk bet on these patents to hold in the PTAB or in court.
The second most pertinent question then arises is that ‘has Yahoo already done away with the most valuable ones?’
Based on USPTO data and publicly available sources, Yahoo has sold about 50 patents to Google, about 25 to Energetic Power Investment, 10 to Snapchat, 9 to LinkedIn and a few more to Alibaba, Match.com, Visa and Pandora over the last 3 years.
These patents relate to practically all technologies in the Yahoo portfolio – database & cache management, cloud tech, social search, e-commerce, messaging, traffic analysis, social networking, funds transfer and many more.
A New York Times articles reported these patent sales to have generated about $600 million over the last 3 years. That’s about less than 200 patents at more than $3 million per patent. Definitely makes you wonder if there really are any valuable patents left! A lot of gray areas, indeed.