Google, Dropbox, Asana, Canon, Newegg, and others have teamed up to stop patent trolls before they can even start. They’ve all joined the License on Transfer Network (LOT), a network of companies that have agreed to license their patents to each other if they ever decide to sell those patents. This isn’t a broad patent licensing, but a way to curtail future patent trolls, or “Patent Assertion Entities” as the LOT calls them, from buying patents from these companies and then using them against others. There are over 300,000 patents in the network, and LOT is open to more members.
The LOT Network is designed to stop that sort of thing from happening in the future. If patents purchased by a “Patent Assertion Entity” are already licensed to most of the other companies that want to use it, the trolls don’t have anyone to sue. The U.S. government isn’t making strides to change this, so Google and other tech companies are taking things into their own hands. LOT is effective because it applies to patents when they are transferred or sold to someone else. It leaves the power of the patent in the hands of the current owner, while castrating patent troll companies that might own the patent in the future.
The LOT Network was created out of Google’s plans last year to join companies together to fight patent trolls. Eric Schulman led the charge, and pointed out some major issues facing these companies. Patent trolls aren’t just picking up old and unused patents. They’re actually buying current patents created by companies that are still in business. Then they are turning on those very companies and suing them for large sums of money. RPX Research says that 70 percent of patents used in litigation suits were filed by companies that are still active.
Dropbox has joined the network because it’s fair and protects both large and small companies. Brett Alten, the IP lawyer at Dropbox, says, “It’s an inclusive model that doesn’t strongly favor large or small companies. Large companies are most likely to sell or transfer assets out of the network. Small companies will be basically inoculated from that kind of threat. And large companies benefit because when small companies fail they often sell patents to trolls.”