Google Will Acquire An Impressive Patent Portfolio From Nest Labs

On Monday, Google announced that it will be acquiring Nest Labs, Inc. for $3.2 billion in cash.  In just a few short years since its founding in 2010, Nest has done an excellent job in obtaining patents related to its self-learning thermostat, smoke alarm, and home automation technology.

Envision IP identified 38 US patents and 40 published US patent applications currently assigned to Nest Labs.  In December 2013, Nest co-founder and CEO Tony Fadell reported that Nest has “100 patents granted, with 200 more on file with the USPTO and another 200 ready to file.”  Thus, Nest presumably filed a large number of US applications within the last 18 months that are not yet publicly available.

In September 2013, Nest entered into a patent sale and license agreement with Intellectual Ventures (IV), where Nest acquired a number of patents related to its product line from IV.  As part of the deal, Nest also obtained a license to defensively access IV’s patent portfolio of over 40,000 patents.  In the fast growing home automation industry, access to IV’s patents may prove extremely beneficial.  The license gives Nest significant ammunition for counter claims if it finds itself on the receiving end of a patent infringement suit from a competitor.

We could not identify any specific patents assigned from IV to Nest, however, the assignment of IV’s patents may not be recorded with the USPTO yet.  We suspect the “100 patent” figure provided by Fadell likely includes the patents acquired from the IV deal.

Google’s acquisition of Nest further adds to the company’s immense patent portfolio, and the Nest patents may complement Google’s technology well.  For example, a recently issued Nest patent, US 8620841, describes integrating home automation and social networking: “a user’s status as reported to their trusted contacts on the social network could be updated to indicate when they are home based on light detection, security system inactivation or device usage detectors.”

As Google and its rivals continue to acquire companies and expand their business reaches, Google demonstrates that patents, not simply talent acquisitions, play a significant part in the company’s long term growth strategy.

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