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Is Apple looking to buy Beats Electronics for its patents?

Photo by Jun Wang, courtesy Creative Commons

Reports surfaced last week that Apple is reportedly in talks for a $3.2 billion acquisition of Beats Electronics. Beats is known for its headphones and speakers, as well as its online music service.

When Beats was founded in 2008, it initially had a manufacturing partnership with Monster Cable Products, Inc. The partnership terminated in 2012, at which time Beats began manufacturing its products in-house.

Envision IP compared the patent portfolios of Beats and Monster to understand the IP that Apple may potentially acquire from Beats.

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Beats currently owns 25 US design patents, 6 US utility patents, and 9 published US patent applications that are currently pending. There has been speculation that Apple is interested in Beats in part due to its online music service. Beats has 5 utility patents and 6 published applications assigned to Beats Music LLC that relate to online music streaming which were acquired from MOG, Inc. in 2012. These patents relate to searching for content in a music sharing environment, sharing music and related meta-data, generating a playlist based on user preferences, and various interactive playlist control technologies.

Beats’ design patents primarily relate to its signature ear-covering headphones, as shown in the figure below from US D632,668.

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Six of Beats’ US design patents were acquired from Monster in June of 2012, and they relate to in-ear buds and over-the-ear headphone hooks.

Monster has a relatively large US patent portfolio, with 165 active US design patents, 54 US utility patents, and 3 published US patent applications that are currently pending. Monster is well known for its audio-visual cables, and many of its patents are related to those product lines. However, 44 of Monster’s patents are related to headphone and audio products. Interestingly many of these are design patents which were filed by Monster in 2011 and 2012, towards the end of its manufacturing partnership with Beats. For example, see a figure from Monster’s US D657,776, to the left.

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If Apple’s interest in Beats is primarily fueled by the company’s online music service, Beats appears to have a patent portfolio that covers many back-end and front-end features of Beats Music. As an added bonus, Apple will also acquire a significant design patent portfolio that covers many aspects of Beats’ headphone and speaker products.

It is not clear how Monster will react to a potential acquisition of Beats. However, Monster has significant IP that protects its product lines – IP that will allow it to compete with any future Apple-branded Beats audio devices.

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