Microsoft Joins Patent Review Group to Avoid Costly Litigation

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Microsoft has become the first member of a crowdsourcing service designed to challenge and invalidate specious software patents sometimes used in expensive lawsuits brought by so-called patent trolls.

Litigation Avoidance is a paid service created by Article One Partners, a global online community of 1 million scientists and technologists. The organization uses crowdsourcing, a social media tool involving massive collaboration over the Web, to compare notes and find evidence about patents with the goal of identifying "prior art" or a previous discovery, which could help nullify a patent that has been filed with the U.S. Patent and Trademark Office.

Article One receives revenues from the companies that use the crowdsourced information, but did not disclose its fees.

One target of the Litigation Avoidance program are non-practicing entities (NPEs), more widely known as patent trolls, according to a statement Tuesday from Article One. NPEs are companies that buy up thousands of patents that are used as the basis of lawsuits against companies that an NPE claims have infringed on its patents and therefore owe the NPE damages or license fees.

Microsoft, no stranger to patent lawsuits brought by NPEs and others, said the Litigation Avoidance service will be another tool to investigate patent quality before going to court. The goal is "to reduce risk and reduce potential litigation cost," said Bart Eppenauer, chief patent counsel at Microsoft, in a statement . "NPEs continue to actively target large technology companies and often with portfolios of questionable quality."

Article One said companies spend an estimated $5 billion annually to defend against NPE lawsuits. The most notorious NPE lawsuit in recent years was brought by NTP Inc. against BlackBerry maker Research in Motion.

NTP won a $612 million settlement from RIM in 2006 as a result of that suit, even though the U.S. Patent office later found prior art that invalidated 97% of NTP's claims. Federal court records have shown that 46% of patent lawsuits resulting in a judgment are invalid, Article One said.

Part of the problem that Article One is trying to address is an inefficient patent review system run by an overburdened U.S. Patent office. Article One's crowdsourcing technology returns results in a matter of weeks -- instead of months or years -- to challenge the validity of a patent, partly because it has so many knowledgeable members globally, Article One officials said.

"Litigation Avoidance addresses the perfect storm resulting from increased NPE activity combined with seriously patent quality questions and an overtaxed USPTO," said Cheryl Milone, CEO of Article One. She noted there are similar services from companies known as RPX and AST.

Florian Mueller, a German patent activist who writes the Fosspatents blog, said in an e-mail that Litigation Avoidance "could make a useful contribution ... to take down low-quality patents."

Still, Mueller said NPE lawsuits are so widespread that they must be tackled from many angles. "Containing the troll problem will certainly take more than this [Litigation Avoidance], especially some Supreme Court decisions in favor of those defending themselves against bad patents."

Mueller said he expects NPEs to continue to file patent lawsuits, especially against mobile device makers and smartphone OS makers, which have been the subject of dozens of patents lawsuits in the past year.

In a somewhat related vein, Mueller on Tuesday described in his blog a complex patent lawsuit by Microsoft against , in which Saleforce countersued over five patents. The suit was settled last year, with Salesforce ultimately compensating Microsoft for its patents used in Saleforce's CRM software.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed . His e-mail address is .

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This story, "Microsoft Joins Patent Review Group to Avoid Costly Litigation" was originally published by Computerworld.

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