Working together to reduce patent litigation

Posted by Eric Schulman, Legal Director

We’ve been encouraged by recent proposals for legislation and other reforms aimed at addressing the growing harm that patent trolls are inflicting on U.S. consumers and small businesses. We also think that companies can work together to help curb excessive patent litigation, so we’ve launched a new cooperative licensing website laying out some of our ideas and soliciting feedback from interested companies.

The problem of lawsuits brought by patent trolls—companies that don't make any products—is huge and getting worse. Additionally, in a growing trend, companies are selling patents to trolls that then use those patents to attack other companies. In some cases, those companies arrange to get a cut of revenue generated from the trolls’ suits.

We think companies should cooperate to reduce patent litigation—what’s been compared to nuclear arms control for the patent world. On our site, we outline several networked, standardized, royalty-free patent licensing agreements that increase companies’ freedom to operate while reducing patent assertions, especially by trolls.

For example, in a License on Transfer (LOT) Agreement, participating companies agree that when a patent is transferred (other than as part of a legitimate spin-out), the transferred patent automatically becomes licensed to other participating companies. Participants are thus protected from any future attacks if the patent was sold to a troll.

The more companies that unite in these kinds of agreements, the more beneficial the agreement becomes to its members, especially companies that don’t regularly sell patents or don’t want to spend money or time defending against trolls.

Take a look at the description of the LOT Agreement and the other approaches on our website and, if you’re interested or have feedback, let us know.