Google, Dropbox and a few other high-tech firms have come up with a new way to help defend themselves against patent trolls.
Patent trolls, or “non-practicing entities,” are companies that buy up old patents and try to monetize them by accusing others of infringement. They usually request a one-off licensing fee to end a lawsuit, something many companies reluctantly pay because it’s cheaper than defending the claim.
The practice has become a significant problem in the high-tech field, in part because of the complex nature of modern software and hardware.
In an attempt to stop it, six high-tech companies have banded together to launch the License on Transfer Network, or LOT Network.
Members of Lotnet retain full ownership and licensing rights of their patents, but they agree to provide each other with a royalty-free license should any of the patents ever be sold.
That means if Dropbox, for instance, sells a patent on data storage to a third party, Google and the other members will first receive a license to the technology. That should insulate them from any lawsuits brought by the patent’s new owner.
Besides Google and Dropbox, the launch members include SAP, Canon, Asana and Newegg. They hope the agreement will reduce the nuisance of patent trolling.
“The LOT Network is a sort of arms control for the patent world,” said Allen Lo, deputy general counsel for patents at Google, in a statement. “By working together, we can cut down on patent litigation, allowing us to focus instead on building great products.”
The group is offering membership to other technology companies.