MovieChat Forums > Silicon Valley (2014) Discussion > The IP alone should be worth more than 1...

The IP alone should be worth more than 1 Mil

posted 8 years ago by pyroKinethic
8 replies | jump to latest

So we have a fully optimized, scalable, lossless codec implementation, that surpasses the theoretical compression ratio limit. Also, it is fully patent-able under US law. Yet, the company fully owning that groundbreaking IP is sold for a mere $1 million (+$1) ? How is that possible? Surely, any company that utilizes video streaming heavily - e.g Netflix, HBO, Google, Facebook - or just any Smartphone or video appliance OEM would want that badly. I don't think such a sale would occur in the real world, it just does not make any sense.

[–] ckwongau 8 years ago

it is fully patent-able under US law

Well , Hooli Endframe has the same compression technologies ,and they are making the "Box"

At this moment , PP no longer has the monopoly over the middle Out Compression tech , and their Platform has fail and also they committed Click Fraud .

[–] pyroKinethic 8 years ago

Well , Hooli Endframe has the same compression technologies ,and they are making the "Box"

Correct, however clearly PP came with Middle-out first. At the Disrupt event. So they have the advantage to file for patent first.

and also they committed Click Fraud

This is relevant to their product (The platform), but irrelevant to the IP itself. It may be used in variety of different platforms that are not related to PP in any way.
Note that many company takeovers have been essentially purchases of patents. See Google <- Motorola.

[–] dma-maillist 8 years ago

I think you are right.

Apparently, PP and Endframe should have different patents in that the code is probably different, even if they essentially do the same thing. I'm sure one is better than the other (probably PP) but it's like having Skype and FaceTime. The patents are there but the products aren't the same.

So, yes, somebody would have bid more than $1 mil (plus $1) on the company just for the patents and there would have been more bidders than just Hooli and Bachmanity. The former bid for spite, so we are led to believe that essentially no one in the Valley would have bid on PP. That's ridiculous.

But, this dramatic device doesn't bother me much. I've been critical before about the show, particularly about Erlich selling his shares, BigHead being swindled, but this one just doesn't seem to bother me. I don't know why.

Would an auction have taken place basically a day or so later? No, of course not. But, it's like court room dramas where lawsuits take place a couple of days after being filed and everything is played out in the court room, when basically every case settles in real life and it takes an interminable amount of time to wind through the court. I haven't seen The Good Wife in a long time, but I'm sure it's like that. Same thing with Law & Order. Cops investigate murder, arrest, immediately the case goes to court, when it would take months probably to happen and, of course, nobody pleads out for a lesser charge.

So, I guess I just think of it as some TV plot device, but in the real world, yes, there would have been companies bidding on the company just for the patents. Heck, even if they never wanted to use it, they might bid on it to just squash anyone else from using it.

So, yeah, you are right, but it's TV and for some reason I don't feel wrong for saying that. It's a show geared for the average person, not someone who even reads the Wall Street Journal and has a notion of patent wars, like those between Samsung and Apple.

People just like smartphones and aren't going to get into the details about the businesses. And this show is for them, mostly.

But, you are correct.

[–] pyroKinethic 8 years ago

Apparently, PP and Endframe should have different patents in that the code is probably different, even if they essentially do the same thing

In the US you can patent an algorithm on its own. Without the need to show the exact implementation. For example the GIF image compression format was patented, which lead to the widespread adoption of PNG. Arithmetic coding (a form of entropy coding, used for lossless compression) was patented as well, which prompted the usage of slightly inferior Huffman coding. Both are examples of patenting an algorithm and not an implementation. Code is in fact copyrighted but not patented since it can change so often: for optimization, bug fixing, etc.

So, I reckon PP can patent middle-out and force Endframe to pay license fee for using it. Although the markets they target are vastly different, it certainly would be justified, even just to piss Gavin off.

Actually, thinking about it again, the lack of actual pending patents may be one reason a potential buyer may choose to be cautious with such an acquisition.

I've been critical before about the show, particularly about Erlich selling his shares, BigHead being swindled, but this one just doesn't seem to bother me.

Yeah, those plot decisions bugged me a little. But you can always explain them with individual character absent-mindedness or downright stupidity. However, the auction is a significant event, which outcome is not expected to be decided by a single person. Had it been just a negotiation then you can say Laurie could decide to sell for sub optimal price, if she just wants to get rid badly, although her character is expected to be all reason and zero emotions.

Would an auction have taken place basically a day or so later? No, of course not

I agree, and I have no problem with it. Actually, leaving it for the next season would not make much sense.

[–] dma-maillist 8 years ago

Yes, I think the GIF and PNG comparison is accurate and better represents what I was trying to say when I used the comparison of Skype and FaceTime. They both essentially do the same thing but are different products.

Thanks.

[–] OddsAreIAmRight 8 years ago

Supposedly the fraudulent misrepresentation and manipulation of Active Users by the CEO of PP had tarnished the value of the company beyond any salvageable IP value.

Except no prospectus was ever put together, and no deal ever inked under that misrepresentation.

And except that was all forgot about in the end anyway when they pivoted to the video chat app.

So basically, don't take the business part of the show too seriously.

[–] finny06 8 years ago

Maybe they decided a patent was too expensive to defend, tried to keep it a trade secret instead, and too much time passed? How much time passed between CES at the end of Season 1, and the liquidation at the end of Season 3? Was it more than a year?

[–] fakeslashdash6 8 years ago

But can you retroactively file for a patent? At this point in time, not only did Pied Piper use it and Hooli have their version with Nucleous (did the public see how bad it was?) but Endframe had their version and don't forget all the programmers left Hooli (twice) can do their own version as well.

With so many people running their own version of it with an impossibility of proving who was first, can you truly file a patent?