Playing Defense Inoffensively—The License on Transfer Network

Six major companies—Google, Newegg, Canon, Dropbox, SAP, and Asana—have launched a program designed to retain the defensive value of patent portfolios while thwarting the future threat of patent trolls. Under the name License on Transfer Network, and as described in Ars Technica, these companies have joined forces—and asked others to join—in a relatively simple pact. Members agree to pool their patents, and to license those patents to all other members of the network—but the license only kicks in when a patent is transferred out to a non–network entity. In other words, the owners can use their patents to go after competitors they believe to be infringing or to defend themselves in lawsuits filed against them by others. What they agree not to do is to sell (or out–source) their patents to a non–network entity who can redirect those patents back at network members— think, a patent troll, whether free–standing or acting in league with the patent’s original owner.

For companies opposed to patent troll behavior, but not willing to abandon the patent system or their own portfolios altogether, throwing in their lot with the LOT network may be worth the annual membership fee of between $1,500 and $20,000 (scaled to a company’s revenue).

Posted by David Swetnam-Burland