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Tech Giants Pooling Cash To Buy Patents
theodp writes with a link to a Reuters report, based on a WSJ story, that "Verizon, Google, Cisco, and HP are among the companies that have joined a secretive group called the Allied Security Trust. Each of the companies will reportedly put $5 million in escrow to allow AST to snap up intellectual property on their behalf before it falls into the hands of parties that could use it against them. Patents will be resold after AST member companies have granted themselves a nonexclusive license to the underlying technology. According to AST CEO Brian Hinman, a former VP of IP and Licensing at IBM, the arrangement will keep member companies out of antitrust trouble." (The WSJ's story itself is more detailed, but it's subscriber-only.)
big corporations are evil. now mod me +5 insightful you fucking sheep.
Tech Giants Join Together To Head Off Patent Suits
By Amol Sharma
Several tech-industry heavyweights are banding together to defend themselves against patent-infringement lawsuits. Their plan: to buy up key intellectual property before it falls into the hands of parties that could use it against them, say people familiar with the matter.
Verizon Communications Inc., Google Inc., Cisco Systems Inc., Telefon AB L.M. Ericsson and Hewlett-Packard Co. are among the companies that have joined a group calling itself the Allied Security Trust, these people say.
One high-profile patent case that sent shivers through the tech industry was BlackBerry maker Research in Motion Ltd.'s $612.5 million settlement in 2006 with NTP Inc., a small Virginia firm that held patents related to wireless email delivery but had never produced a mobile-email device. The four-year legal battle at one point threatened to shut down BlackBerry service nationwide.
Also troubling for tech firms, a number of companies have emerged in recent years with a business model based on acquiring intellectual property and using it as leverage to extract royalties from companies whose products or services rely on that technology. These companies, which critics call "patent trolls," look for patents that come on the market from companies going out of business, universities and individual inventors.
The Coalition for Patent Fairness, a group of technology and financial-services companies that has lobbied for patent legislation in Washington, says the number of patent-related lawsuits rose to nearly 2,500 through October of last year from 921 in 1990. The so- called trolls aren't the only ones suing. Many companies, including Qualcomm Inc. and Rambus Inc., have been aggressive about enforcing their patents on their rivals.
The new Allied Security Trust aims to buy patents that others might use to bring infringement claims against its members. Companies will pay roughly $250,000 to join the group and will each put about $5 million into escrow with the organization, to go toward future patent purchases, the people familiar with the initiative said.
Tech companies have tried various ways to protect themselves, including investing in Intellectual Ventures LLC, a patent-holding firm founded by former Microsoft Corp. executive Nathan Myhrvold. The companies provide money to help Mr. Myhrvold buy patents, and he in turn grants them a license to his portfolio. But some in the tech industry fear Mr. Myhrvold's venture, which has collected thousands of patents in areas such as networking and software, may itself become an aggressive patent enforcer down the road. Mr. Myhrvold has said litigation isn't part of IV's strategy, but hasn't ruled it out.
To head off such concerns, companies in the new group will sell the patents they acquire after they have granted themselves a nonexclusive license to the underlying technology. "It will never be an enforcement vehicle," said the group's chief executive, Brian Hinman, a former vice president of intellectual property and licensing at International Business Machines Corp. "It isn't the intent of the companies to make money on the transactions." He declined to confirm who the group's member companies are.
Mr. Hinman said the group doesn't face any antitrust issues because it isn't a profit-making venture and its members don't actually own patents -- they just grant themselves a license to them.
Ron Epstein, CEO of patent brokerage IPotential LLC, says companies that collect intellectual property are a boon to individual inventors who otherwise struggle to make money from their work. Mr. Epstein, formerly director of licensing at Intel Corp., said any company should be free to enforce its patent rights, regardless of whether it produces any products or services. "That seems to me a distinction without a difference," he said.
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Don Clark contributed to this article.
Sounds like racketerring in a sense. IANAL, but I wonder if an ambitious prosecutor somewhere could use the RICO statues instead of anti-trust statutes.
Any lawyers familiar with RICO want to chime in?
This is actually what this group is trying to get away from. They hate lawyers as much as the next guy. They'd love to kill every lawyer in the country every generation. (You'd still need lawyers and just killing them off wouldn't stop people from going into law anyway.) Their damn problem is people like you! Yes piss ants like you that want to sue their ass. Why? They have resources, and you want them! Thief.
There are days I'd actually want some corporate feudalism except that'd require two way loyalty. Trust me I can live with IBM, HP, MS and Google doing this. I'm not worried about them. I'm worried about the dreamchasers that want to sue their companies into the ground because they have billions and make toys that my company and I buy to run our business.
compl3tely before