Patent Law

The following is excerpted from a December 10, 2009 article by Lee Gomes of Forbes Magazine:

It's hardly surprising that many companies would rather pay to settle a patent claim than risk the exposure and expense of a trial. So patent claims have soared in recent years. Roughly 80% are entirely without merit.

That figure is a guess provided by John Amster, the 41-year-old chief executive of RPX. The entrepreneurial insight at the heart of the company is simplicity itself. Start a for-profit company that buys up patents and then charge other companies a yearly fee for being a client. In return for a set annual payment, which tops at $4.9 million for the biggest outfit, you're protected from being sued for any of the patents RPX holds.

Like most tech business plans that attract venture capitalists, it's all a matter of scale. Given enough clients, RPX can have the resources to take all problematic patents off the market.

Read the full article here.