Tech Companies Launch New Coalition To Keep Operating Company Patents From Ending Up Abused By Trolls

from the good-for-them dept

Tech companies, even those that dislike the patent system (which is many of them), still feel pressured into getting lots of patents, often for defensive purposes, to avoid lawsuits. However, as we've discussed in the past, even patents that are initially obtained for defensive purposes are a nuclear weapon problem in waiting. Companies fail all the time, and their patents suddenly get sold off to the highest bidder -- and quite frequently these days, those are trolls. Some companies have tried to come up with unique and innovative ways to stop this potential trolling problem. For example, a few years ago, Twitter came up with the Innovator's Patent Agreement (IPA) which basically lets the engineers named on a patent issue a free license to whomever they want for the life of the patent. This is sort of an anti-troll talisman, because that engineer can simply go and give a free license to anyone a troll threatens.

While other companies haven't jumped on the IPA bandwagon, it appears a bunch of tech companies are trying something different. Google, Newegg, Dropbox, SAP, Asana and Canon have teamed up to launch the "License on Transfer Network," which is a royalty-free patent cross-licensing program, for any patent that is transferred outside of the group. The basic deal is pretty straightforward: if any company in the group transfers a patent outside the group, for any reason, everyone else in the group automatically gets a royalty-free license to that patent. Obviously, this kind of program really only works if lots of companies join, but they've made it incredibly easy to join. And, as Asana notes in its blog post about the program, there are tremendous network effects as more companies join:
The LOT Network is a powerful new idea that we hope will grow rapidly. Because of the inherent network effects, every additional company that joins the coalition will be a new nail in the patent troll coffin, diminishing the size of their potential market. As this happens, everyone will be able to direct more of their energy back to creating value.
Asana and Dropbox, which also put out a blog post about this both note that this only solves one aspect of the patent trolling problem, but it's still nice to see companies coming up with innovative solutions to try to pre-empt certain types of patent trolling problems.
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Filed Under: licensing, operating companies, patent trolls, patents
Companies: asana, canon, dropbox, google, newegg, sap

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