Startup Seeks To Preempt Patent Trolls

anaesthetica writes "The WSJ reports that a San Francisco startup is buying up patents with the promise never to assert them in order to help large corporations hedge against patent trolling firms. The company, RPX Corp, receives an annual fee in exchange for licensing the patents it has purchased. Cisco and IBM have already signed up for this service of 'defense patent aggregation.'"

Comments

Preempt them

[nurb432]

By being one..

This just in

[TheSpoom]

Company buys up all other patent trolls, seeks funds from major companies while saying "we don't use them against you (if you pay us), honest!"

News at 11.

Re:This just in

[virtualXTC]

That's what I didn't get.
If they "won't assert their claims" then why do you need to buy a license from them?
If you do need to buy a license from them, how are they not trolls?

Re:This just in

[networkBoy]

maybe because the license fee is not extortionistic, but rather only covers the cost of staff?

Re:This just in

[SydShamino]

I believe their claim is that they won't assert these patents against anyone. IBM isn't willing to buy out these patents to prevent their exploitation, but IBM is willing to donate a smaller amount of money to achieve the same thing. Cisco believes the same thing.

I see this as companies doing something that is beyond themselves. It's in their own interest, yes - the have neutralized a series a patents at less than it would cost to buy them or fight off a lawsuit - but in the process they have protected other companies that didn't help fund the operation.

Re:This just in

[Piranhaa]

I can see it from both sides and I'm not entirely sure where I stand.

Take these into consideration however:
1) They need money in order to buy patents out. This isn't an ad driven service...
2) They do have to buy out a LOT of patents (only if the squatter is in fact willing to give it up) to make this worthwhile.
3) The patents were already held in hand, so it could have ended up in a multimillion dollar lawsuit OR the companies wanting to use them would not have been able to make a product with that particular patent, resulting in unattainable revenue.
4) If the price is reasonable, it's basically a (cheap?) insurance policy. It's practically a guaranteed way to use any patent this company has.
5) Companies don't need to request, or pay large amounts per patent, but rather pay into the pool and can use them ALL.

These are just some of the facts that came to my head. What I want to know is what happens if a company decides not to buy in, or doesn't realize they are violating a patent, if they'll get slammed hard.

Also, if these guys are just squatting on these patents and not producing ANYTHING with them, how will they hold up in court? IANAL, but I thought a company needs to show some effort in actually USING the technology for it to be considered VALID.

What?

[Anonymous Coward]

Won't this just encourage patent trolls?

Wait a minute...

[roc97007]

Isn't this, like, the same thing... only cheaper?

Amazing

[stinerman]

If this isn't a wakeup call to Congress that our patent system is entirely and completely broken, I don't know what is.

Any doubt left that patents are bust ?

[Alain Williams]

Probably the only voices left saying that patents are OK belong to certain ''well funded'' politicians.

I'd imagine IBM is smarter than that

[Sycraft-fu]

What you do is you have them sign a contract. The contract says thing like "You can never sue us." When you buy a company, you buy their obligations too. You don't get to say "Oh look, we are a new company so we can just ignore the contracts." Nope, you bought all that as well.

Remember: If you could get out of a contract with a sale, people could do this with houses. For example I buy a house, I sell it to you for a dollar. I then don't pay the mortgage. The bank comes to repossess the house and you say "It's my house, you can't take it, the contract is void because of the sale." No, not the case actually. Turns out if that mortgage isn't paid off, the bank gets to take the house (this is what title insurance is for, in case the sale is invalid). You can't just eliminate the contract like that.

So all companies have to do is make sure when they sell patents, it is done with a good contract. Then if a company buys it out, well then they'll be bound by the contracts too.

Re:I'd imagine IBM is smarter than that

[TheRaven64]

You don't get to say "Oh look, we are a new company so we can just ignore the contracts." Nope, you bought all that as well.

Nope, you liquidate the first company, sell its assets (the patents) to a third party, and then let the company fold complete with all of its contracts. Someone else buys it for a dollar and gets all of the remaining assets.

Re:Could we call it the General Patent License?

[TubeSteak]

As I see it, patent pools like this turn patent law against the patent trolls in much the same way that the GNU General Public License and other copyleft licenses turn copyright law against some publishers of proprietary software.

A patent cartel ("defensive pooling" my ass) only protects members of the cartel.
It doesn't 'free' patents like the GPL 'frees' software.

Re:Could we call it the General Patent License?

[HungryHobo]

Lets try a situation:
So I own a real, useful, solid, patent on something novel. A posterboy patent of when it's a useful system.

They do the "we will not attack anyone unless you attack a subscriber" stunt.
The next day one of their subscribers blatantly steals my work, starts producing my product in their fabs and bankrupting me.
I try to apply my patent and get raped by their pool of patent troll patents when they use them to fight back.

It's still patent trolling.