10 Patents that Launched Billion-Dollar Empires

To pivot or not to pivot. That’s the question hundreds of technology startups ponder when their original vision fails to take flight. For some, it’s a successful move. Consider Pinterest, which launched in 2009 as a mobile shopping app called Tote, or Groupon, which began life in 2007 to promote consumer activism before morphing into a wildly successful daily deals site.

Other startups remain true to the original vision of the founders. By analyzing their first patent filings, it’s easy to see which ones have remained committed to plans likely first sketched on a whiteboard in a spare bedroom. In many cases, these “seminal patents” closely describe what the company stands for today.

Here are the first patents granted to ten of Silicon Valley’s hottest companies. Fledgling startups when they first filed to protect their intellectual property, they’ve since created billion-dollar businesses around the seminal inventions detailed below. Most of them have gone on to build out robust patent portfolios, and several are using IPfolio to manage those today.

1. Dropbox: Network folder synchronization

Filed in August 2010 by Dropbox co-founders and MIT alums Drew Houston and Arash Ferdowsi, this patent details how multiple clients can share and synchronize folders and their contents across a network. Version control ensures everyone can access the latest iteration of a file. If you’ve ever used Dropbox, you know this is a core part of why online file sharing and access became so popular so quickly.

2. FireEye: System and method of detecting computer worms

Former Sun Microsystems engineer Ashar Aziz founded security startup FireEye in 2004. His vision was first detailed in this March 2005 patent. His method of identifying and responding to a specific network security risk category evolved into the company’s main product line, the FireEye Malware Protection System. A massively successful IPO on NASDAQ followed in 2013.

3. Zynga: Asynchronous challenge gaming

Zynga VP Andrew Busey and software engineer Christian Primozich filed this patent in November 2008 to protect Zynga’s nascent social gaming plans. The method described how individual characters and character teams could challenge others based on characteristics such as abilities, powers, defenses and performance levels. While Zynga’s vertiginous growth has levelled off, the brand remains synonymous with social and casual gaming on mobile and desktop.

4. Square: Systems and methods for decoding card swipe signals

Square certainly had its IP management strategy devised early on; it filed its first patent and a dozen others on the same day. This patent, which cited founding engineer Sam Wen as inventor, was filed in October 2010. It details exactly what anyone who has visited an arts and craft festival in recent years knows well – swiping a credit card on a mobile phone is an incredibly easy way to buy and sell anything. It’s also a great way to create a multi-billion-dollar valuation.

5. Facebook: Dynamically generating a privacy summary

Interestingly, this isn’t the first patent granted to Facebook co-founder Mark Zuckerberg, though it was the first that he filed. Six years passed before he and co-inventor Chris Kelly, Facebook’s Chief Privacy Officer, received formal approval of their invention in July 2012. It addresses privacy settings, and systems and methods to dynamically generate a privacy summary based on an individual’s privacy setting selections.

6. Theranos: Medical device for analyte monitoring and drug delivery

Few people beyond the medical research industry and Silicon Valley venture capital circles had heard of Elizabeth Holmes before she vaulted into the media spotlight in 2014 as the youngest self-made female billionaire on the Forbes 400 list. This application filed in August 2005 was her first. Based on a vision of rapid medical diagnosis and treatment, the method is a wearable patch to help administer drugs, monitor patients’ variables in the blood, while adjusting the dosage as needed. Many other patent applications – Holmes is listed as a co-inventor on over 100 – have followed, including one in 2007, Real-time detection of influenza virus. Considering that the World Health Organization estimates an annual influenza death toll worldwide of between 250 000 to 500 000, that could be a lucrative patent. Not surprisingly, Theranos’ valuation now exceeds $10B.

7. SolarCity: Methods for financing renewable energy systems

The home solar industry had been in existence of decades when VP of Strategy David Arfin unveiled an innovation (March 2008 patent filing) that was recognized in 2009 by Scientific America as one of twenty world-changing ideas to build a cleaner, healthier and smarter world. The SolarLease® is a business method using tax-deductible home loans to finance solar installations. Rampant growth using the lease process detailed in the patent made SolarCity one of the hottest brands in the resurgent renewable sector in the USA.

8. GoPro: Harness system for attaching camera to user

GoPro founder and CEO Nicholas Woodman’s vision has always centered on enabling people to record the fun part of life. His first patent, filed in February of 2004, detailed a harness to attach a camera safely to your body so it wouldn’t dislodge while surfing, rock climbing, dancing, kiteboarding or doing anything else. GoPro’s growth soared starting in 2009 upon the release of its own line of affordable video cameras, and the brand has become synonymous with recording life’s dynamic moments.

9. Google: Method for node ranking in a linked database

This is Google’s famous PageRank patent. Larry Page’s invention valued a webpage based on how many other pages linked to it. Filed in January 1998, the approach provided a significant improvement in the quality of search results, a key factor in Google’s rise as the dominant search engine. Interestingly, the original assignee was Stanford University, which received 1.8 million shares of Google stock in exchange for a long-term license. When your company name becomes a verb, you know the IP behind the activity is pretty valuable, and worth protecting.

10. Apple: Microcomputer for use with video display

Decades before Apple expanded into mobile communication, music distribution and timepieces, it was synonymous with digital design. Steve Jobs’ less well-known co-founder Steve Wozniak invented a method for displaying color and high resolution graphics using a standard cathode ray tube, which this April 1977 filing described.

Protecting The Next Big Thing

Silicon Valley is all about innovation, and IP management is a vital part of ensuring that inventions are protected. As this list shows, many of the Valley’s biggest names are still following the innovation vision detailed in their first patent filings.

At IPfolio, we have been been fortunate to grow up witnessing the success of these companies, and we are looking forward to helping the next generation of entrepreneurs manage and protect their creativity.

From Startup to Established Player in 30 Months

It’s been quite a journey.

Just two years ago, IPfolio was in its early startup days. We were getting our very first customers up and running at a pace of one per month. Doubters argued that the world did not need another IP docketing tool.

But building another docketing tool was never our intention. Against the conventional wisdom of our industry, we made two key assumptions in creating IPfolio:

1. The vast majority of all corporate IP groups around the world relies on outside law firms for their prosecution, and therefore does not need a traditional docketing system. What they need is a flexible tool for organizing and managing their IP-related information and activities, not thousands of country laws.

2. By building on a cloud platform (PaaS, Platform-as-a-Service), we can deliver a better product at a more attractive price than even the biggest players in our industry with their decades of experience, substantial resources, and practice of cross-subsidizing their software units to lock customers in with their lucrative service businesses.

These were big bets, but today everything indicates that we hit the mark with both of them. In the global innovation hotspot that is the San Francisco Bay Area, the hottest new technology companies are turning to IPfolio in droves as they look for the right tools to support their ambitious IP programs.

Outside our home territory, our customer base is growing rapidly in all parts of the world, particularly across North America and Europe. IPfolio has become the tool of choice not only for innovative startups, but for forward-looking IP organizations in companies of all sizes. Today, our largest customer is a member of the U.S. Fortune 20.

We have managed to attract top talent with decades of industry experience to our growing team, as well as significant investment to grow our business, and we receive praise from customers around the globe.

Our new website reflects how IPfolio has evolved from an entry-level offering to an established player that addresses a broad market. We have grown out of our startup days, but the journey has just begun.

Stay tuned!

The Future Lies in Managing IP as a Business Asset

Two weeks ago, Intellectual Asset Management (IAM) software vendor Anaqua Inc. reportedly received a $100m investment. The number does not appear to be officially confirmed, and different sources on the web are inconsistent about whether it represents a funding round, an outright acquisition, or a mix of both. Either way, the figure is impressive and has sent a few ripples through an otherwise placid industry.

For much of the past decades, conventional wisdom about the IP management business has had it that IP-related services, particularly renewal payment services, were the primary source of customer value – and profit – in this industry. Software was frequently used as a loss leader, a bait to win a lucrative renewals deal, or gimmick to be thrown in to increase differentiation against the competition. That was the era of docketing systems, electronic diary and calendaring tools that helped with the legal and administrative aspects of filing and prosecuting patents, such as calculating due dates, filling out forms, and paying fees.

In the mid 2000’s, new players like Anaqua in North America and Unycom in Europe entered the scene from a different perspective, and started to build pure-play software companies around the value proposition of managing intellectual assets from a business perspective. Please see our recent Whitepaper for a more detailed look at the differences between docketing systems and intellectual asset management software (IPfolio belongs to the latter category in case you had any doubt).

The behemoths of the renewals industry were quick enough to react, and used their strong cash flows to serially swallow up smaller software companies. This way, several emerging innovative players in the software market have been reduced to door-openers and customer retention instruments for the ever-lucrative renewals business, which did not help to drive software innovation in our industry.

In 2010 however, Anaqua was the first company to turn the tables and acquire a renewals service provider. Sticking to their original playbook – keeping their software offering as the main value proposition – and providing renewals as a value-added service on top seems to have worked out quite well.

We follow a similar vision, with the difference that IPfolio strives to make advanced IP management technology available to the broadest possible audience, while Anaqua appears to remain strongly focused on the large-enterprise market. So I am very excited to see them doing so well. Their successful investment round/acquisition validates the business model of IPfolio and other software-centric players in the IP Management space, and serves as an indicator that the tides have shifted: IP services are becoming increasingly commoditized, and IP management software like IPfolio is the real driver that delivers added value to clients’ businesses, helping them to create, protect, and utilize intellectual property that is aligned with their business strategy.

Glimpsing into the future, I will not be surprised if we see more successful software companies acquire providers of renewals and other commoditized services, rather than the other way around as we have witnessed in the past. A new era has dawned, and clients will benefit by getting ever-better tools to manage their valuable IP assets.

USPTO to Select its Silicon Valley Location

Silicon Valley is one of the most IP intense regions in the world. The city of Sunnyvale has the highest number of inventors per capita in the world, according to recent data from the USPTO. IP has been making headlines lately with big Silicon Valley companies like Google, Apple, Yahoo and Facebook battling over their patent rights.

However, IP is not only for large companies with huge portfolios, it is extremely important for smaller companies as well. Many startups, right here in Silicon Valley and elsewhere, build their IP strategies early and pursue patents and trademarks as an integral part of their business strategy. In fact, startups building their IP portfolios form a significant part of our customer base.

The IP community in Silicon Valley is now growing even stronger with the U.S. Patent and Trademark Office’s expanded operations here. A temporary USPTO location has been set up in Menlo Park, and the new permanent office is scheduled to open in 2014. It’s the first time in history for the Office to operate outside of the Washington DC area. The first outpost in Detroit was created last year, and the new Silicon Valley office will open its doors in one of the candidate cities of Sunnyvale, Santa Clara, Mountain View or San Jose. The South Bay was selected based on ease of transportation and access to multiple major airports, as this office will be a hub for the western region of the US.

Michelle Lee, USPTO Silicon Valley Office Director, said in a meeting in Sunnyvale this past May 4 that the main purpose of the Silicon Valley location is to provide faster and better access to the USPTO and to offer easier communication with patent applicants. A further goal is to attract talented staff to reduce the backlog of unexamined patents, which will help companies move their innovations to market more quickly.

We have seen first-hand how patents are a significant factor in private sector job creation. It is nice to see that the U.S. Commerce Department has taken note and reported that IP-intensive industries are the source of 40 million jobs, contributing $5.06 trillion to the U.S. economy in 2010.

The opening of the local USPTO outpost will bring even more IP activity to Silicon Valley and the San Francisco Bay Area, and we are likely to see more IP-related business expand on the U.S. West Coast. We are excited to be growing right along with the Bay Area IP community!

The Mindset of an Innovator – Creating an Innovating Company Culture

Companies need great innovators to come up with solutions for the future. Many firms have established formal innovation programs to encourage their engineers to come up with new and innovative solutions to their customers’ problems. Incentives are often financial and based on number of invention disclosures submitted and intellectual property granted. But what type of mindset does a successful innovator have? What can managers do to stimulate an innovative company culture? What softer factors should organizations consider when designing invention programs? Here are some basic tips on how companies can understand the “innovation mindset” and encourage an innovation driven culture.

Encourage Out-of-the-Box Thinking

An innovator needs to be visionary and have imagination. A true innovator can imagine things that don’t exist yet and envision solutions that will lead to a better world. Managers should encourage their staff to envision the future, think big and contribute to a work environment where new ideas are embraced. A successful innovator has the courage and support from management to share her/his thoughts and ideas with team members, no matter how big or small the ideas are.

Collaboration is Key

Successful innovators collaborate and try new things together with colleagues and co-inventors. Team members that support others’ ideas and are helpful to others are more successful than people that just keep everything to themselves. Management should encourage a “sharing” culture.

Work Hard and Don’t Give Up

Inventors should not be afraid of failure but embrace challenges. A successful innovation culture encourages the teams not to give up but to be determined and work hard. Hard work should be rewarded.

Reflect – What Works and What Doesn’t Work

It is also important to be reflective and evaluate why things are not working but also why they are working. Inventors should get feedback from others on a regular basis. Encourage an environment that is friendly and open for feedback.

Talk to Customers to Validate Ideas

Innovators need to know scientific facts and principles relevant to their work. They need to know how to use technology and tools that allow them to create, test and share their ideas. But innovators also need to understand their users and incorporate the user’s mindset when developing and testing new ideas. Customers are no longer just consumers, they are often co-creators and very active in letting companies know what they want or don’t want. Today’s technology allows for a whole new way of communicating, collaborating and sharing ideas. Understanding the user has never been easier, and managers should encourage innovators to talk to customers often to get input and validate ideas.

The Collaborative Innovation Process

The basic innovation process starts with identifying the goals. What problems need solutions? What are our aligned values as a company? What are we trying to accomplish? What are your specific objectives for R&D and innovation investments, and how will you connect your investments with innovation output?

The next step is to generate ideas, share those ideas and get some feedback. The third step is designing the solutions, and the fourth step is creating the solutions. The new creations are then tested and evaluated. If necessary, the solution is tweaked or redesigned in another iteration.

Each of these steps fills an important part of the company’s success to innovate. And did we mention to share throughout the process…?

Does your company need a culture change to be more innovative? Or are you ready to tackle the competitive global markets in the way you are currently set up?