Welcome to the IP Bubble

As tech companies buy and sell patents for escalating sums of money, it’s beginning to look a lot like a bubble. What should CFOs do to value their companies’ intellectual property accurately and diligently?

May 14, 2012

By David Rosenbaum – CFO website

Last summer Google bought cell-phone maker Motorola Mobility for $12.5 billion, largely for its treasure chest of 17,000 patents.

Last month, preparing for its initial public offering, Facebook paid Microsoft $550 million for about 625 of the 925 patents Microsoft had just purchased from AOL for $1 billion. What’s in all those patents, no one will say. It’s possible that no one — not even the folks at Facebook and Microsoft — know what they all contain, as software code is extremely difficult to catalog, classify, and track. Referring to Motorola’s 17,000 patents, patent litigator and IP monetization practice leader for DeWitt Ross & Stevens S.C. Joseph Miotke says, “It would take centuries to map out all those patents.” Mapping AOL’s might take proportionally fewer centuries.

This article can be found in its entirety on the CFO website.