Richard Lloyd

Uber has launched a patent purchase initiative as it looks to bolster its still relatively small portfolio. The programme will be known as UP3 and is modelled along the same lines as the Industry Patent Purchase Promotion (IP3) and Google’s 2015 Patent Purchase Promotion. UP3 will be led by Kurt Brasch, who pioneered the relatively painless approach to patent deals while he was at Google as a way to give patent owners a quicker and easier way of selling their assets.

As with the Google programme and IP3, which was overseen by AST, sellers will be given the opportunity to submit their IP for sale and name their price. Uber will then evaluate the patents, determine whether it wants them at the named price and let the patent owners know all in a matter of months. Thus, UP3 effectively takes potentially months-long negotiations out of the equation. Uber will accept submissions between 24th April and 23rd May, with all sellers notified of the company’s decisions by 7th July and contracts signed by the end of August. One key difference with IP3 is that rather than submitting just a single family for consideration, under Uber’s initiative patent owners will be able to submit portfolios of up to five patent families.

“Obviously we’re trying to grow our portfolio organically, but also by being strategic about some of our acquisition targets,” Brasch commented. “We participated last year in IP3 and really saw the benefits of it in terms of the speed of the transactions and simplicity of negotiations.”

But unlike IP3, which featured AST and a consortium of 21 companies deciding what to bid for, Uber is launching UP3 by itself. According to Brasch, that gives the company the advantage of being able to make quick decisions in terms of which patents make the most sense for the business - but it will mean that all of Uber’s 10-strong patent team will be involved in evaluating the submissions.

One of the reasons programmes like this are so attractive to operating companies, Brasch pointed out, is that putting a price on a patent remains particularly tricky. “In the secondary market valuations are so difficult because sellers are scared to put real values on their assets - which is why we spend upwards of 12 months to close a deal,” he said. 

Brasch joined Uber in September last year as senior manager of patents in a clear play by the business to grow its portfolio via the secondary market, possibly in the run-up to an IPO. Since he joined he has been busy in the acquisitions market at a time when patent valuations remain depressed in the US. According to some recent research from Envision IP, Uber acquired 66 patents and 10 applications from AT&T in January, bringing its portfolio to 144 US grants. It has also picked up a package of 11 patents from Apparate International that relate to autonomous vehicle technology and a portfolio of nine assets from the Palo Alto Research Center (PARC).

Uber’s patent acquisitions have tended to focus on its main business areas to cover ride sharing, mapping and navigation, and autonomous vehicles, but Brasch indicated that in UP3 the company is prepared to look at any patents submitted. He also didn’t rule out making purchases in the future from Intellectual Ventures, which recently confirmed that it is pulling out of the acquisitions market while also increasing its rate of sales, although he stated that they were not actively looking at the firm’s portfolio.    

Both IP3 and Google’s initiatives generated a lot of interest and have been hailed as great successes in streamlining the sales process. IP3 made 56 offers to acquire 107 active patent filings at an average price per family of $96,000. The total outlay was more than $5.3 million with purchase prices ranging from $10,000 to $325,000. AST, which ran IP3, has since offered sellers the opportunity to name their price to speed up the deal process.

Until recent months Uber has been a relatively low-profile player in patent terms. That has been upended by a recent dispute with Waymo, Google’s self-driving sister company, filing a lawsuit against the ride-sharing giant accusing it of patent infringement and trade secret theft concerning self-driving technology. That case, perhaps more than any other, shows the importance of having a broad and high quality portfolio in such a fiercely competitive market.