The turmoil within the search advertising and marketing industry forced Conductor Founder Seth Besmertnik to rethink the patent model and decided to start giving away the trade secrets and technology his company's engineers worked so hard to create.
"Lawsuits stifle innovation and competition," he said. "Who loses? The customers lose."
There are lots of reasons not to license the patents for free, he said. It could become a problem if the company is ever acquired, and it could lower the brand's overall worth.
But there are just as many reason to do it, he said, such as creating competition and goodwill and building the importance of organic marketing and content intelligence.
Conductor has about 20 pending and granted patents, ranging from creating task management around SEO to page-scoring methods. Patent No. 8,583,681 describes a system and method for filtering keywords. Granted by the U.S. Patent and Trademark Office in 2013, the patent filters keywords and determines a second set of keywords based on the first set. Another patent — No. 8,239,405 — granted in 2012 is based on keywords filtering on combined scores.
Conductor files between four and eight patents annually at a cost of about $30,000 to $40,000. There is an annual fee as well -- about $200,000 for a company with a similar portfolio.
Companies that might want to license the patents include start-ups or established companies that want to compete with Conductor.
"I'm not telling companies to compete with us," he said. "Let's win on the battlefield of what customers want, not on an undated war chest."
Besmertnik said Tesla did something similar. Tesla CEO Elon Musk wanted to bring more competition into the car industry, so he decided to license the company's patents to others for free.
Besmertnik wants to avoid the types of patent disputes that others have gone through, such as the most recent one between Searchmetrics and BrightEdge.
Searchmetrics filed for Chapter 11 bankruptcy protection in Delaware early in May. The company was forced to file for protection after a long-standing battel with BrightEdge after the company secured patents in Europe, but failed to secure the same patents in the United States. Searchmetrics alleges BrightEdge moved in to secure those patents in the U.S.
The idea behind filing for Chapter 11 was a "swift and global resolution of two lawsuits against the company, including a patent lawsuit and a trade secret lawsuit filed in California federal and state courts," according to Searchmetrics' release.
Before the filing, Searchmerics received a commitment for new financing from its parent company. The financing allows it to continue normal operations during the Chapter 11 process.