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IP, Patent

Is Groupon’s Patent Really Worth More Than The Entire Nortel Portfolio?

Since initially writing this post about Groupon’s use of the patent marketplace to acquire this patent to counter a lawsuit from MobGob, I’ve learned that Groupon just can’t stay out of the news.  Whether it’s for getting involved in another patent infringement lawsuit or turning down a $6 Billion offer from Google.  While I do still think the idea Groupon had (to acquire the fire needed to “fight fire with fire”) was a good one (and likely to be repeated in the near future), I get the feeling that others are reading far too much into Groupon’s patent acquisition by suggesting that the patent is motivating Google’s purchase.  While patents are a component of a many deals, lawyers should really do a better job of setting realistic expectations when it comes to assigning value.

In a recent interview with the National Law Journal, attorney Patrick Arnold was asked his opinion about Google’s $6 Billon offer:

NLJ: Google’s $6 billion offer is awfully high for a company founded two years ago. What do you think?

PA: My first thought was somebody probably looked at the technology and the patents closely, and felt like Groupon was in a pretty good position and had a strong patent and/or patent portfolio. I would also imagine…that Groupon has at least one patent and maybe others that Google has done some internal analysis of and said, ‘That’s a good patent and would be good for stopping others from getting into the business.’

via Expert: Groupon’s Appeal to Google Was Likely Patent-Related.

So according to NLJ’s “expert,” Groupon’s patent portfolio is likely the primary driver in a $6 Billion offer …  To put things in perspective, Google’s offer is 6 times higher than the number pegged for the highly sought-after, 4000 patent Nortel portfolio (rumored to be worth about $1 Billion dollars).

It’s true that Groupon does have at least one patent.  They may have others that we don’t know about, for a variety of reasons, but let’s start with what we know, which is one issued patent claiming a specific method for marketing limited time offers that includes “calculating a price … dependent upon … an aggregate amount of … product that … buyers have collectively indicated a willingness to purchase.”  Is it possible that Google, a company that apparently can’t muster an offensive counterattack to Oracle, would be interested in this patent to the tune of $6 Billion?

Or could the data-hungry Google empire be after something else that Groupon might have been collecting over the past few years …

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Discussion

8 thoughts on “Is Groupon’s Patent Really Worth More Than The Entire Nortel Portfolio?

  1. Ha! In my sickbed today, and this was just what I needed to make me feel better. I am literally giggling over this–both from the standpoint of the ridiculousness of the comment, and from the aspect that this is what passes for expert commentary in a leading legal publication. There has never been–and there will never be–a patent portfolio that is worth anything near this amount. Google, and other acquirers, buy business models, not patents. As we strategy focused IP people have been saying for years, a patent is worthless unless it covers a viable business model–either yours or one you want to own. Google is interested in Groupon because it offers them an established business model in an area that fits into their long term business strategy. Are the patents nice to have? Of course, but if Groupon didn’t have the patents, Google would still want to own them.

    As long as patent “experts” continue to delude themselves into thinking that patents are the be all, end all of the business world, business leaders will find reasons to doubt the value of patents to their business value. Put simply, patent experts totally lack credibility when they assert that patents drive business decisions, and they will be dismissed by business leaders as understanding law, but not business. As a result, business will continue to think that patents and IP are legal issues, not business issues, and we will not have a seat at the table when $6B tender offers are made.

    Posted by Jackie Hutter | December 16, 2010, 9:40 am

Trackbacks/Pingbacks

  1. Pingback: Tweets that mention Is Groupon’s Patent Really Worth More Than The Entire Nortel Portfolio? « Gametime IP -- Topsy.com - December 16, 2010

  2. Pingback: Patent "Expert" Opinion on Reasons for Google Tender Offer for Groupon Reveals Fundamental Problems with IP Professionals – IP Asset Maximizer Blog - December 16, 2010

  3. Pingback: More Google Acquisitions "Driven" By Patents — And Other Unanswered Questions « Gametime IP - January 17, 2011

  4. Pingback: When Is A Billion Dollar Patent Not Worth A Billion Dollars? « Gametime IP - February 16, 2011

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  6. Pingback: Mark Cuban Doesn’t Shop For Patents On Shark Tank « Gametime IP - May 31, 2011

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