Social networking site Facebook’s $19 billion acquisition of instant messaging service WhatsApp will not bring the company any new patents.
The takeover, completed yesterday, February 19, is the fourth largest technology acquisition of the decade, according to news website USA Today.
Facebook has acquired a large portfolio of patents over the last two years after buying 750 from technology company IBM and another 650 from Microsoft, that were originally owned by AOL.
However, it will receive no new patents from the WhatsApp deal.
According to IP research service Envision IP, the messaging service owns no patents and has only one published application and three unpublished applications.
Its published application, US20120294352, covers “multimedia transcoding and formatting of data exchanged between mobile phones.”
“It is quite possible that many of the IBM and AOL patents owned by Facebook are relevant to instant messaging, group chat, and distributed communication; patents that could potentially protect WhatsApp’s platform,” Envision said in a blog post, published on February 20.
Paul Devinsky, partner at McDermott Will & Emery LLP in Washington, DC, told WIPR that for people who view the world “through the prism of IP”, the deal was a “head scratcher” – given what is known about the “rather scarce IP assets” of WhatsApp.
Devinksy added: “It seems that Facebook, fairly flush with IP assets from other recent deals, was looking for something else entirely.”
WhatsApp, which offers free instant messaging using the Internet, was founded in 2009 by Ukrainian Jan Koum.
It has more than 450 million users a month and nearly one million new sign-ups a day.
“The question is whether Facebook, with its new WhatsApp users, has a strategy to monetise its new service and new user base,” said Devinksy.
Jay Jurata, partner at Orrick Herrington & Sutcliffe LLP, said although the company may not have patents registered, there were other forms of protection it could rely on.
“They may not have any patents but there are many ways to protect an invention, such as trade secrets,” said Jurata.
“It seems like more of a business decision by Facebook, which is trying to be more offensive in its efforts to attract customers by having a programme with the ability to weed out text message charges.”
Christine Lehman, partner at Finnegan Henderson Farabow Garrett & Dunner LLP, said although the deal did not seem to be driven by “patent rights” WhatsApp’s relatively young age could have been a factor.
“Despite efforts to improve the backlog at the US Patent and Trademark Office, it still takes years to obtain patents, so a young company like WhatsApp simply may not have been around long enough to have many issued patents.
“WhatsApp is a young company with interesting technology, but without clear patent protection one still has to wonder if more competitors will pop up.”
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patent, trade secret, Facebook, WhatsApp, IBM, Microsoft