Posts Tagged: "patent assertion entities"

Limiting the Impact of Patent Assertion Entities on the Open Source Community

There has been a great deal of discussion over the years regarding patent trolls, also known as non-practicing entities (NPEs) and Patent Assertion Entities (PAEs). As most of the IP world knows, these organizations, either alone or in partnership with an inventor, look to leverage a patent or a portfolio in order to seek financial return from companies allegedly utilizing the technology. On the other side are organizations that have in many cases advanced and refined the base technology and created products therefrom who are seeking a way out of potentially high litigation costs by working to determine the need to potentially license the patent/portfolio or to fight patent infringement claims if the PAE has moved beyond assertion to litigation.

IBM, Toyota Join LOT Network, Underscoring Rapid Growth for the Patent Risk Management Consortium

Information technology giant IBM recently announced that it had agreed to join the LOT Network, a nonprofit patent risk management consortium designed to immunize its members from lawsuits filed by patent assertion entities (PAEs). The move brings an additional 80,000 patents and patent application under the aegis of the LOT Network, which currently offers its members immunity to 2.3 million global patent assets should those patents ever be sold to companies that make more than half of their gross revenue from patent assertions. Since the IBM announcement last week, LOT Network has added a few new members, including Japanese carmaker Toyota, which just announced today that it has agreed to join the consortium. Since we last covered LOT Network in August 2018, the organization has more than doubled in size from about 275 companies up to 623 companies. Since it was founded in 2014, LOT Network’s membership has increased by a compound annual growth rate of 115%.

Patent Assertion Entities Invest Twice as Much in R&D as Major U.S. Tech Firms

Rather than frustrate innovation, Maurer and Haber found that patent assertion entities have research and development expenditures which, on average, are twice that of U.S. high tech firms… Public PAEs do not appear to operate in a manner consistent with the hypothesis on patent trolls, which includes the view that PAEs own patents which have no value and that they file frivolous lawsuits that amounts to a tax on innovation.

Patent Encumbrances Can Reduce Market Value up to 100 Percent

Patent broker Brad Close notes that encumbrances can have the effect of reducing a patent’s value by up to 100 percent, practically rendering a patent valueless on the market. “If the only companies which are potential targets for a license are already licensed, then the intellectual property is essentially worthless,” Close said. “If a startup is considering entering into an agreement that would place an encumbrance upon a patent, I would advise them to be very sure that what they’re receiving in return offers adequate value and to take into consideration both their investors and the future of the business,” Close said.

Facebook patent infringement suit against BlackBerry looks remarkably patent troll-like

Facebook is asserting a series of patents the company has acquired from other firms, making its actions similar to those of non-practicing entities (NPEs) and remarkably patent troll-like. After all, we have been told time and time again by those who have advocated for patent reform and a systematic dismantling of the patent system that a telltale sign of a truly bad actor like a patent troll is that the patents were not the subject of homegrown innovation, but were rather acquired from true innovators and then used to sue others. That, however, is precisely what Facebook is doing here.