Cloud Computing Patents

Cloud computing patents are internet-based computing inventions that provide people with the ability to utilize shared computer processing resources. Thus, those cloud users can store data on a variety of software applications that are shared with others. Such cloud computing can be a great benefit to businesses depending on the company’s size, industry, and goals. Such benefits can include lower costs, easier maintenance, added flexibility, and improved IT security. Some of the most popular examples of cloud computing services include IBM, Google, and Amazon Web Services.

Risks of Cloud Computing

With the above-mentioned benefits in mind, there is also great risk when using the cloud to store and maintain data. But a lot of businesses, and generally speaking, the public, aren’t aware of such risks, or the risks simply go overlooked. Storing patent information on the cloud could be a benefit for Patent Assertion Entities (“PAEs”), which are businesses that acquire patents from third parties and subsequently seek to generate revenue by asserting them against supposed infringers.

  • PAEs generally store countless patents on the cloud, usually vague and/or broad patents, for the purpose of suing companies on the grounds of patent infringement in order to earn compensatory damages and/or ongoing royalty payments.
  • The reason PAEs do this is because it is easy to find infringers by utilizing codes for open source, thus making the cloud an easy target.
  • PAEs then target cloud customers as customers don’t usually have the same level of knowledge as cloud service providers and are less prepared to defend a patent infringement suit.

Enforcement of Cloud Computing Infringement

Since there is no such thing as an international patent, PAEs cannot file an infringement claim in one country  (the U.S.) and receive compensatory relief for a patent that is protected in another country, i.e. Europe. Therefore, if the PAE wants to go after the alleged infringer, then it will need to file claims in any country in which the product is being used. For strategically important patents, they are always part of a patent family that are granted by several countries. The IFI Claims Service examines the geographical distribution of companies that are assigned U.S. patents. The top 5 countries include:

  • United States – 41%
  • Japan – 28%
  • Korea – 15%
  • Taiwan – 4%
  • Germany – 3%

Based on the significant difference between U.S. patents (167 in total) and the total number of patent families worldwide (1,616 in total), it’s clear that a majority of strategically important patents are being filed outside of the U.S., which is where a lot of infringement cases are brought. For example, Switzerland is a common jurisdiction for enforcement, as it is a party to many international IP treaties. Recognition of foreign arbitral awards usually holds merit in the Swiss Federal Supreme Court, as the court has a narrow interpretation of public policy and generally hesitates to re-examine the merits of foreign arbitral awards.

A Prime Example of How Cloud Computing Can Be Protected: IBM

Over the past year and a half, IBM has obtained 1,200 patents on cloud computing. Its patents are more general in nature, specifically general cloud processes or operations that other service providers already use. For that reason, IBM’s patent library may be used to demand royalty payments or other monetary relief if others hold a patent on it. However, based on the U.S. Patent and Trademark Office’s issuance of Patent 8,949,415, a business operating in the cloud computing space can conserve network bandwidth by conducting a network disablement action. Thus, businesses can use secure data and deploy secured data to one or more secure servers, thereby reducing what is left on the cloud. Other patent issuances by the USPTO provide safety measures for businesses operating in the cloud computing industry and storing such important and confidential data on the cloud.

If you need help with learning more about cloud computing patents, or need assistance in defending an infringement suit against a PAE, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.