A group of technology companies, from startups to Silicon Valley giants, have joined forces to ward off patent trolls – people or firms that buy old patents and try to monetize them by accusing others of infringement.
Companies like Google, Dropbox, SAP, Canon, Asana, and Newegg have banded together to launch the License on Transfer (LOT) Network. The idea behind the alliance is that if a member sells their patents to an entity outside of the network, all other members will be granted a royalty-free license to the technology, insulating them from any future lawsuits.
Members of the network, however, can sell patents to each other under normal terms. They are also free to protect their patents (which they haven't sold) via litigation. Between the six of them, the companies hold more than 300,000 patent assets, including more than 50,000 issued US patents.
"The LOT Network is a sort of arms control for the patent world," said Allen Lo, deputy general counsel for patents at Google. "By working together, we can cut down on patent litigation, allowing us to focus on building great products".
According to Google legal director Eric Schulman, who led the initiative, more than 60% of patent litigation in 2012 was started by trolls, and more than 70% of the patents used by trolls were generated by companies still in operation.
The LOT network is also offering membership to other companies, who can apply online to join the network. Annual membership fees range from $1,500 to $20,000 based on the company's annual revenue.