Commerce One, a software company, has filed bankrupcty and is in the process of liquidating its assets. Among those assets are 39 patents for web services, many, if not all, of which are widely used today.
This is causing several industry leaders concern, as they have incorporated into their own software web protocols which, arguably, could be covered by the 39 patents about to hit the auction block.
They are worried enough that this week attorneys from Google, Oracle, Sun, and a dozen other companies all got together to discuss the situation. They have even discussed going in together to bid on the patents themselves.
According to Jason Schultz, an attorney with the Electronic Frontier Foundation (EFF), “There’s a concern that these patents could be used aggressively by a buyer to shake down the whole Web services industry.”
In addition to those companies involved in this week’s discussions, other companies out there have cause to be worried, including IBM and Microsoft. The new owner of these patents could look for royalties or lawsuit settlements in the dozens of millions of dollars.
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Of course, if the patents bring in enough money, then Commerce One would really no longer have a need to file bankrupcty, or, if they have already passed the point of no return, could simply reinvent themselves.
This leads Aunty to wonder if this isn’t actually a brilliant new business strategy. Amass several software patents, make sure that the technologies embodied within get broad industry adoption, run your own company into the ground so that you can take massive losses, then file bankrupcty and auction off the patents, and make more earnings and profit in one week than you did at any other time. All without the hassle of having to file patent infringement suits yourself.
Brilliant.
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