Kodak, once a giant in the photography industry, spent millions annually on patent maintenance fees even as their revenue dwindled. Many of these patents were no longer aligned with their strategic goals or market needs, leading to unnecessary financial strain without corresponding returns.
This contributed to Kodak’s struggle to pivot and innovate effectively, ultimately leading to its bankruptcy filing in 2012. The case showcases the need for regular evaluation and pruning of patent portfolios to focus on high-value assets and save the company from financial pitfalls.
Similarly, Alibaba faces a significant financial commitment with its extensive patent portfolio. As of December 2023, Alibaba holds over 3766 US-granted patents. Of these, 365 US patents are up for maintenance fee payment in Q3 2024 (July-September 2024).
Identifying the Potential Savings
GreyB’s in-house tool, Prunr, evaluated approximately 10 out of 365 US patents owned by Alibaba and found that those with maintenance fees ranging from $3760 to $7700 (¥26,775 CNY to ¥55,587 CNY) were less relevant to its current market products.
The maintenance fee for these patents amounts to about $60,000 USD (¥433,152 CNY), offering Alibaba a potential 7% savings on their Q3 fees.
How Prunr Does It:
Prunr solves the challenge of paying maintenance fees on patents that don’t have a significant return on investment (ROI). The tool evaluates patents based on 14 parameters, including:
- Alignment with the Company’s Strategy: Ensuring the patent supports the overall business goals.
- Potential High Value for the Company: Identifying patents with the potential to generate significant revenue or competitive advantage.
- Industry Trends in Patent Abandonment: Analyzing which patents are being abandoned by other companies in the industry.
By assessing these parameters, the tool helps identify patents that may not be worth the cost of maintenance, allowing companies like Alibaba to focus their resources on high-value assets.
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The Broader Impact
The 10 patents extend to over 129 families, comprising over 50 granted members. Furthermore, they span top jurisdictions such as the US, EP, JP, and CN, with an average approximate maintenance fee of ¥100,000 CNY pending altogether. Reviewing the entire patent families and their potential could result in even greater savings, multiplying the amount Alibaba could save in the long run.
Validating the Analysis
To validate the Prunr tool’s insights, we conducted a quick manual review of some patents identified as low potential and those deemed valuable.
Patent for which Alibaba can skip paying the maintenance fees:
US8375107B2: The due date for maintenance fee payment of this patent is August 12, 2024. The maintenance fee amounts to $7700, as it is in the third cycle of maintenance fee payments. The Pruner tool indicates that this patent family has low potential.
The ‘107 patent covers a technology that makes browsing the web on mobile devices faster and smoother. It does this by predicting what pages you might want to visit next based on the words you’re searching for and how you typically use the browser. It then starts loading those pages in the background before you even click on them. Once they’re ready, the pages are organized and displayed to make your browsing experience quicker and more seamless.
Upon quick review, although the broader market potential is significant with companies like Google, Apple, and Opera providing web browsers (Chrome, Safari, Opera, etc.), the specific implementation of keyword analysis, as discussed in the patent, does not seem to be widely adopted. For example, Google uses techniques such as Prerender and NoState Prefetch for preloading web pages based on criteria like user input, mouse hovering, bookmarks, or website suggestions, which do not involve the keyword analysis method described in the ‘107 patent. The method, such as Prerender, currently being used seems to relate more with the state of the prior art mentioned by the patent.
Probable patent, which Alibaba should pay the maintenance fee for
US9596564B2: This patent expires on September 14 with a maintenance fee of $3760 as it is in the 2nd cycle of maintenance fee payments.
The patent discusses a method to provide Location-Based Services (LBS). LBS services are offered to users’ mobile devices, allowing users to send and receive service messages through an application to a selected group of individuals. The method can match users based on their proximity and shared user identifiers. Users within a specific range and with matching needs can be grouped together for interactions. The Pruner tool indicates multiple potential family members for this patent.
Upon review, one of its family members, US10531223B2, shows potential against location-based matching technologies used by dating apps like Bumble and Tinder. These apps use features similar to those described in the patent claims, such as proximity (location data) and matching based on user identifiers (such as profile data) to provide relevant profiles to users.
Prunr’s indicators can guide Alibaba in performing a detailed review of potentially low-value patents to make informed decisions about maintaining or abandoning them. By focusing on patents with higher strategic and market value, Alibaba can optimize its patent portfolio and allocate funds more profitably.
Conclusion
Regularly evaluating and pruning patent portfolios to focus on high-value assets is not exclusive to a single company like Alibaba. GreyB’s Prunr tool is designed to assist businesses across various domains, including Telecom, Networking, and Semiconductors, as well as NPEs holding large patent portfolios. Its monthly and quarterly reports provide insights into patent performance, industry trends, and potential cost-saving opportunities. These insights help organizations focus their maintenance fees on high-value patents, optimizing their IP budgets.
Fill out the form below to identify and prune non-essential patents in your portfolio and ensure your company’s resources are invested in patents that truly add value to your business.
Authored by: Ayushi Roy and Rohit Sood, Infringement Team
Edited by: Annie Sharma
