Box, Inc.’s S-1 filing for its IPO was released last week. Envision IP reviewed the filing to understand how Box has protected its technology, and how its patent portfolio compares against its peers. Box states in its S-1 that “[a]s of January 31, 2014, we had four issued U.S. patents….and we had 80 pending patent applications in the U.S”. (Page 102).
Envision IP identified 4 issued patents and 53 published applications currently assigned to Box at the USPTO, however, the remaining applications may either not be assigned or published yet.
Box’s main competitor, Dropbox, owns 8 US patents, and has 17 published applications. However, as with Box, we suspect that Dropbox likely has a number of pending applications that have not yet published. Of its issued patents, 5 were originally filed by Dropbox. The remaining patents were acquired from AT&T, Audiogalaxy, and Modular Security Systems.
The patent acquired from AT&T is US 6078929, entitled “Internet file system”. The ’629 patent has a priority date of 1997, and has 130 forward citations, indicating that it may be relatively fundamental to the file-sharing industry.
Envision IP collaborated with Deltasight to create the below infographic of file-sharing patenting activity among popular start-ups and established technology giants.
Box, Dropbox, and File Sharing Patent Portfolios
SugarSync – 6 US patents, 1 published application
iDrive – 5 US patents
Soonr – 4 US patents
Accelion – 2 US patents
Egnyte – 2 published applications
It is important to note that distributed and networked file sharing is not a new technology or concept. Traditional technology companies own significant IP in this space; IP that Box, Dropbox, and others may need to license or acquire at some point. Below is a breakdown of some of the larger technology companies and their patents related to cloud based file sharing, backup, and transfer:
Microsoft (SkyDrive)~ 615 US patents
IBM ~ 591 US patents
Citrix (FileShare) ~ 302 US patents
EMC (Mozy) ~ 206 US patents
HP ~ 190 US patents
Apple (iCloud) ~ 90 US patents
Google (Drive) ~ 71 US patents
Box states in its S-1 filing that “many of [its] competitors and other industry participants have issued patents or filed patent applications, and have asserted claims and related litigation regarding patent and other intellectual property rights” (Page 102).
For example, Box was sued for patent infringement by OpenText in June 2013. OpenText is seeking $268 million in damages. OpenText has asserted 12 patents across 3 patent families in this case. The 12 patents on average have approximately 50 reverse citations each, and approximately 16 forward citations each. The reverse citation count is relatively high, and may indicate that these patents will fare better during an invalidity challenge, especially since some of the asserted patents have a priority date going back to October 1997. However, the forward citation count is relatively low (compared to the Dropbox patent mentioned above acquired from AT&T which has 130 forward citations). The low forward citation count may indicate that as a whole, these OpenText patents may not be extremely fundamental to the file-sharing industry. One exception however is US 6223177, which has 77 forward citations, and is related to a web-based collaborative workspace.
As was the case with Facebook and Twitter, Box may likely seek to defensively acquire patents from Microsoft, IBM, and others (possibly even OpenText) in the coming months, to shore up its portfolio and mitigate further patent litigation risk.