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Yahoo! Dumps 3,000 Patents on the Auction Block

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By Jonathan R. Tung, Esq. on June 10, 2016 10:56 AM

A few months ago, Yahoo Inc. moved about 3,000 IP patents into the patent holding company Excalibur IP LLC, and started puffing up value. The details have been in the tech news for a while and already speculators are positioning themselves accordingly.

"This represents a unique opportunity for companies operating in the Internet industry to acquire some of the most pioneering and foundational patents related to Web search and advertising," Yahoo said of the sale. And rumor has it that sale estimates should top $1 billion.

Yahoo Leaves Core Internet Business Behind

Yahoo released news of its patent sale a few days ago coinciding with news breaks that Verizon put up a bid for Yahoo's core internet business assets in the amount of $3 billion. This sale -- which is separate from the "patents only" auction, contains about 500 patents and 600 pending patent applications.

Something Troubling About This

There' something a little troubling about this Yahoo patent free-for-all and it looks like Steven Levy at Backchannel already beat me to it. A discrete sale leaves open a very big possibility that troll companies will jump on the sale, acquire patents for whatever (illicit) reason, and use them to cease-and-desist good-faith users till they're blue in the face and light in the wallets.

Levy even suggested that the best option for the entire community would be for another tech giant to buy the entirety of the discrete sale of Yahoo patents rather than have a bunch of entities pick them off. He likens the entire situation to MAD, the Cold War nuclear notion that neither the Soviets nor the West would dare be the first to launch a nuclear offensive on the knowledge that ten more missiles would be fired in response. This, he intimates, is preferable to multiple companies having a nuclear weapon.

It's a cogent point and deserves consideration. If one were to take the analogy further, it would be accurate to say that entire countries (companies) exist solely to patrol the US Patent registry and look for violations.

Is that the purpose of the patent office? It certainly shouldn't be.

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