February 26, 2024

When an organization known as Allied Safety Belief got here out of hiding in late June, it triggered new gentle to be shed on the rising reputation of patent swimming pools involving excessive tech titans. It is lower than clear, although, whether or not these swimming pools are benign defensive organizations or trade-restraining innovation killers.

Allied Safety Belief is simply the newest consortium of enormous know-how firms created to buy and pool vital patents. The thought of a patent pool is easy: Firms coordinate their mental property efforts by shopping for vital patents and granting all members of the consortium non-exclusive licensing rights to make use of them. First used within the 1800s, patent swimming pools decrease danger and price for collaborating corporations by avoiding costly litigation.

Lately, know-how corporations have been more and more utilizing patent swimming pools to do exactly that. Apart from Allied, whose members embrace Verizon, Google, Cisco and others, there are a selection of different know-how patent swimming pools, every with a barely totally different technique and roster of gamers. Open Innovation Community, a pro-Linux group counting Novell, IBM and others as members, was organized in 2005. Mental Ventures, stated to be backed by Microsoft and Intel, has been buying its patent portfolio since 2003.

Battling Trolls

Firms concerned in these organizations declare they’re strictly defensive, combating different firms whose sole enterprise is to purchase mental property and maintain it hostage. These so-called trolls are directly loathed and feared as a result of litigation may be costly, time consuming, and distracting. Extra favorably known as PLECs, patent licensing and enforcement firms, these trolls patrol the mental property panorama in search of ignored patents which have wide-ranging applicability to the know-how world. As soon as they personal mental property they think about to be infringed, they contact customers of the patented know-how and demand fee. In a pleasant transaction, the PLEC licenses the know-how to different firms. In an adversarial state of affairs, litigation ensues.

Essentially the most profitable conditions for the PLECs are these the place the infringing firm has deep pockets or there are lots of infringing corporations. It’s exactly these conditions that patent swimming pools are designed to stop. By primarily out-investigating or out-bidding the trolls, patent swimming pools keep away from litigation and/or licensing prices.

Constructing Fortresses

However critics of recent know-how patent swimming pools say they’re anti-competitive. By shopping for mental property, these teams are solely a level away from the trolls, say opponents. Within the case of Allied, to develop into a member an organization has to pay a reported $250,000 to affix and put up one other $5 million in escrow towards buying patents. The members then grant themselves non-exclusive licensing rights.

In Allied’s case, CEO Brian Hinman claims it’s going to then promote the patents again into the market. “It is a catch-and-release method dealt with on an opt-in foundation,” he instructed the EE Instances in June 2008.

Critics contend that this merely permits the trolls to prey on smaller corporations that may’t ante up the cash to affix the unique patent swimming pools. The consequence, they are saying, is that the tech giants reinforce their dominant positions within the market.

Different patent swimming pools, although, apparently aren’t in search of to construct mental property fortresses the place solely the elite can reside. Open Innovation Community makes its patents accessible royalty-free to anybody who agrees to not sue members. In the interim, these kind of swimming pools appear to be extra benign, fostering as a substitute of proscribing innovation.

Oligopolies or Beneficent Entities?

Some observers worry the proliferation of those patent swimming pools will end in oligopolies. The commerce of key mental property between these teams is seen by some as akin to nations aligning themselves for their very own profit. It’s fairly potential that totally different teams may cooperate on technique and even take part in formal or casual treaties.

Actions like these would possibly simply be construed as anti-competitive. In the interim, gamers in patent swimming pools are limiting their strikes to defensive actions. However mental property being what it’s the main tech firms collaborating in these associations might not stay so gracious.