Legal News

In Fight Against ?Patent Trolls,? a New Arrow in the Quiver?

By Ashby Jones

They’ve been the scourge of many in the technology and intellectual-property world for some time now: the so-called patent trolls. These are firms that buy up patents to seek royalties from other companies, but typically don’t themselves make or sell products that use patents.

The fighters of the trolls might have a new arrow in the quiver, in the form of a San Francisco start-up rolling out a new service focusing on what it calls “defense patent aggregation.” Here’s the story, from the WSJ’s Don Clark.

The company, called RPX Corp., buys up patents to keep them from firms that might use them as the basis of lawsuits or to press for licensing payments. Companies that pay a fixed annual fee receive licenses to the patents purchased by RPX, which pledges never to assert them.

John Amster, RPX’s co-chief executive, hopes to attract hundreds and eventually thousands of corporate members. “At thousands of members I think it’s a game-changing business,” Mr. Amster said. RPX is backed by two venture-capital firms, Kleiner Perkins Caufield and Byers and Charles River Ventures. Already, Cisco Systems and IBM have signed on as clients.

RPX isn’t the only organization trying to aid potential patent defendants. And as the market grows, these troll fighters could wind up bidding against each other on patents. For now, however, there are apparently enough patents to keep everyone happy, and to keep these new organizations from viewing each other as competitors. “They are completely complementary,” says Daniel McCurdy, the CEO of a similar organization called Allied Security Trust. (Click here for an LB post from earlier this year on AST.)

A spokesman for Cisco, which is based in San Jose, Calif., said RPX’s “objective of defensively pooling patents is a sensible approach to the continuing problem of litigation by firms that don’t produce products or services.”

Photo: iStockPhoto

Full post as published by Law Blog - WSJ.com on November 24, 2008 (boomark / email).