Tech vendors team up to thwart patent trolls

News by Richard Thurston

Google, Cisco, HP, Ericsson and Verizon have created an organisation to snap up technology patents before the so-called patent trolls, in an attempt to head off the threat of costly litigations

Some of the world's largest technology companies are bandying together to try to head off the threat of costly legal actions by so-called "patent trolls".

Patent trolls, or patent-holding companies, exist purely to acquire patents with the purpose of conducting litigation against manufacturers. The number of litigations conducted by so-called patent trolls has been growing in recent years, and is causing increasing concern for technology manufacturers.

To counter this trend Google, Cisco, HP, Ericsson and Verizon have created an organisation to buy up relevant patents on their behalf.

The Allied Security Trust will retain $5m from each company to buy patents at their request. The vendors intend the Trust to purchase the patents most relevant to their technology, instead of them falling into the hands of the patent trolls. If multiple member companies are interested in a patent, then the cost of purchasing it, and the ownership, is shared.

The Trust says it will act purely to purchase patents and that it will not assert any of the patents it buys.

Six undisclosed companies are also part of the Trust, and the organisation plans to attract another 20 to 30. Each one will have to pay $250,000 to join.

There have been several large recent examples where a patent-holding company has litigated against technology manufacturers.

In one of the most prominent examples, NTP extracted $612.5m from BlackBerry maker RIM in a settlement after it argued that it owned patents surrounding mobile email. NTP followed up that case by suing AT&T, Sprint Nextel, T-Mobile USA and Verizon.

Last week, intellectual property licensing company Saxon Innovations sued Acer, Apple, Dell and HP.

The Allied Security Trust will be headed by a two-strong management team, including former IBM vp of intellectual property Brian Hinman.

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