Posted: June 16, 2016

Contributed by John Sullivan

The acquisition

“Revitalizing Microsoft,” “connecting Office directly to LinkedIn,” “embedding Lynda’s training videos inside of Microsoft software,” “giving Cortana digital assistant access to data from LinkedIn,” “renewing the decelerating growth of LinkedIn,” “weaving social networking into its productivity software,” and “the coming together of the professional cloud and the professional network” are a few of the catch phrases that can be found in the media to describe the benefit of the impending acquisition of the business-oriented social networking service company LinkedIn by mega tech company Microsoft for $26.6B.

At Chipworks, we think about patents, a lot

When we see a merger like this (and 2015 was rife with them), we like to examine the exchange of IP that may be involved in such a transaction. At a glance, Microsoft’s portfolio of US patents currently stands at approximately 50,000, compared to LinkedIn’s US patent portfolio of 1,085.  Microsoft is well known for asserting its patent rights and has even created a licensing entity Microsoft Tech Licensing Ltd. That being said;

It's obvious that this acquisition isn’t necessarily about the IP assets of LinkedIn. 

However, let’s have a closer look at LinkedIn’s portfolio to see if there are any hidden gems inside that would represent a nice fringe benefit to what already looks like a mutually beneficial acquisition.

LinkedIn's patent portfolio

LinkedIn’s portfolio consists of 1,660 active patent documents. The majority of the portfolio is comprised of 1,085 active US patents. Of the 1,085 US patents, 206 are originally assigned to LinkedIn; the remainder of the US portfolio was acquired through the acquisition of companies and their IP, or from the direct purchase of patent assets. The most notable patent acquisition by LinkedIn happened in 2015 when they purchased 791 patents from IBM, which at the time, doubled the size of its portfolio. LinkedIn also acquired a number of patents from some other interesting companies such as AT&T, Cisco, and Yahoo. The purpose of these patent acquisitions is unclear, but some speculate that they simply acquired these assets to keep them out of the hands of non-practicing entities with whom they have recently been engaged in litigation.

Litigation history

LinkedIn has been involved in 44 litigations as the defendant during its lifetime. It is not apparent that licensing their IP aggressively is a part of their overall IP strategy. As stated earlier, Microsoft’s patent portfolio is substantially larger. It seems obvious that the acquisition had nothing to do with a potential exchange of IP, but could there be a nugget or two of gold within LinkedIn’s small portfolio that would be a pretty nice side effect of the acquisition? Let’s see if we can find one.

Looking for a hidden gem

We examined LinkedIn’s portfolio a little more closely using Chipworks Patent Analytics Solution Powered by KMX. The landscaping tool allows one to quickly understand the high-level makeup of the portfolio. The patent landscape below is a graphical representation of LinkedIn’s patent portfolio. All patent documents are represented by a colored dot on the map. Patents with similar text are grouped together. Topographical peaks denote key technology concepts and the top three most frequently used words for each peak are shown. 

As can be seen from the landscape below, there are substantial peaks around areas related to Social Networking, Data Processing, and User Interface. It is logical for patent groups such as these to be owned by a company like LinkedIn. 

Microsoft-Linked-Patents-social-network-data-processing

Message, email, mail patents

There is also a peak of 30-40 patents centred on the words “message, email, mail” that looks interesting. After all, email is a completely ubiquitous technology.

If we drill down deeper into this group of patents, one patent jumps out that looks particularly interesting.

One patent entitled, “Method and apparatus for minimizing storage of common attachment files in an e-mail communications server” was originally assigned to AT&T and has a priority date of November 30, 2000. It has two independent method claims and one apparatus claim. This patent is higlighted in the image below. 

The essence of the invention of this patent is to provide a method by which, when a mail server receives an email with an attachment, the system performs a search for another copy of the same file attachment which may have been previously stored. If the file exists, the system creates a link between the current email and the existing file copy. Do mail servers operate this way? If they do, which is highly likely, then this patent could be of great value for Microsoft to get off the street or to use in asserting their IP rights.

In conclusion, if this acquisition is finalized, there are many reasons to be hopeful that it will be mutually beneficial for both Microsoft and LinkedIn, with the potential added benefit of acquiring a few useful patents.