How patents help Software companies

Over 80% of the value of the top 500 companies comes from their intangible assets. The most valuable companies today are technology companies like Apple, Microsoft, Google, Amazon, and Facebook, who have products that are technologically superior to their competitors, who patent these technological improvements to grow and sustain their market share and gain an advantage over their competitors.

Most of us use video conferencing software to work from home. Trainers use these tools to conduct online training sessions. One such video conferencing software is Zoom. Let’s say during a training session, the trainer is sharing a proprietary image or video to the participants. Zoom calls can be recorded, participants can take screenshots, etc. and then distribute them, which would be a violation of copyright. To prevent this, Zoom has a feature to embed a watermark into an image or a video to enable detection of the source when someone distributes content that was captured from a Zoom call.

Often, at the end of the training sessions, group photographs are taken. Now let’s say that a group of participants attend a training session via Zoom and want to take a group photograph. Zoom has a feature for combining the individual thumbnails of the participants and automatically taking a group photograph on a video conference call. Aren’t these useful features? You won’t see these in any other video conferencing tool like Skype or Hangouts. Do you know why? Because Zoom has patented it!

The granted US patents that I am referring to are US10523900B1 titled “Method and apparatus for capturing a group photograph during a video conferencing session” and US10419511B1 titled “Unique watermark generation and detection during a conference.”

Zoom has leveraged US patents to generate a competitive advantage. They have invented superior technological features and patented it so that even big companies like Google and Microsoft cannot copy these features. Because of their exclusive rights to use these features, they can charge premium fees to their customers and still not lose them to free software like Hangouts or Skype. The bottom line is that they make more profits! In the future, if Microsoft wants to implement these features on Skype, they will have to license the patents from Zoom or acquire the company. Big companies have grown by acquiring smaller companies and one of the key factors that drive such acquisitions is patents. Because these patents give increased market share and exclusivity to their owners, they increase the valuation of these companies.