Swiping or snapping up a play out of previous unicorns’ IPO playbook it appears Snap went to the IBM R&D well to draw up some IP and patent protection. Is IBM becoming Silicon Valley’s east coast research center? While I could see why Investors and Venture Capitalists wait to address the pending patent problems that hit around an IPO, the bigger question for me is, “if IBM is so good at inventing lead edge technology, where is their capability to operationalize it?” Why settle for $9 or $10M in a last minute patent sale when you could stand up a division and raise the billions these unicorns appear to justify. As an IBM shareholder I’d like an answer.
Snap’s S-1 filed last week provides further insight into the company’s patent portfolio. The S-1 states “[a]s of December 31, 2016, we had 328 issued patents and approximately 220 filed patent applications in the United States and foreign countries relating to our camera platform and other technologies. Our issued patents will expire between 2017 and 2035.” (Page 122)
We analyzed Snap’s patent portfolio last September, at which time we identified 280 US patents assigned to the company, with 245 having been acquired from IBM. Interestingly, Snap lists the weighted average remaining useful life-years of its patent portfolio at 9.2 years (Page F-21). It is not clear if this remaining term is just for its US patent portfolio, or if it includes overseas patents. We determined the average term of the patents acquired from IBM last year to be approximately 9 years. With US patents having a 20 year term from their earliest effective filing date, the vast majority of Snap’s patent portfolio has less than half of its term remaining.