Several tech companies are forming a new, anti-patent troll coalition

Tech companies, even those that dislike the patent system, 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 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.

A fellowship consisting of budding enterprise software startups to some of Silicon Valley’s greatest giants are banding together to fight trolls. Patent trolls, that is. Self-dubbed as the LOT (License on Transfer) Network, the slowly-but-surely growing consortium aims to reduce the risk of and litigation itself related to “patent privateering.” Some of the members of the LOT Network (namely Google)as well as the White House, among others, have previously railed against the financial and creative dangers presented by the practice that has become commonly referred to as patent trolling. According to the LOT Network’s announcement on Wednesday, there were more than 6,000 lawsuits filed in the United States last year by “non-practicing entities,” which the group further referred to as patent trolls. The LOT Network added over 70 percent of the patents used by trolls come from operating companies. LOT Network is a forward-looking community that promotes innovation by reducing the risk of litigation from Patent Assertion Entities. There are already almost 300,000 patent assets, including more than 50,000 issued US patents in the LOT Network. To combat this trend, the LOT Network is basically taking a more open source approach with a royalty-free cross-license agreement by pooling patents together. Companies that join the Network will receive a license to protect them when patents are transferred out of the LOT Network, meaning that the patents’ original owners retain rights to enforce whatever they own. But when a patent is put up for sale, members of the LOT Network are still protected by those licenses from whatever “troll to which the patent was sold.”