The License on Transfer Network is a LOT of Good

A coalition of tech companies (Google, Canon, SAP, Newegg, Dropbox and Asana) recently announced a new private initiative to disarm patent trolls: the License on Transfer Network (LOT). This is essentially an extension of Google’s Open Patent Non-Assertion Pledge (OPN) that I wrote about in my very first Patent Progress post last year.

In the OPN, every included patent carried a non-assertion pledge that traveled with it. Selling off the patent doesn’t remove the pledge. Once a patent is in the OPN, it’s in for good, meaning it can’t be used by patent trolls.

The LOT Network is a coalition of companies who have all agreed to one basic idea: if a company in the coalition sells a patent, all the other companies are automatically licensed to the patent.

This still allows any coalition member to sue another member directly for patent infringement. But they won’t privateer against each other, and even if their patents end up in trolls’ hands, every coalition member is protected.

LOTlogoBecause we’re talking about thousands of patents, the coalition members have made a dent in the patents available for patent trolling.


Roundup of This Week’s Patent News: July 11 Edition

Hi there!  We finally have some patent news this week.

First of all, we got a small victory in the fight for patent reform.  The Obama Administration allegedly backed down from nominating patent reform opponent Phil Johnson to be the head of the PTO after opposition from the tech industry (including from CCIA).  This is encouraging, and hopefully President Obama will nominate someone who helps him accomplish patent reform, as he had called for in the State of the Union.

In legislation news, yesterday the TROL Act was passed out of a House Energy and Commerce subcommittee.  This is not a good thing.  A few weeks ago Matt explained why focusing on demand letters is not helpful for those of us who actually want to fix the troll problem.  After the bill was referred to the full committee yesterday, CCIA released a statement with more information about why this particular bill is so problematic, including that it will impair the FTC’s and state AGs’ abilities to go after trolls.

And on Wednesday, six tech companies announced a new agreement called the License on Transfer (LOT) network that should help prevent patents from getting in the hands of trolls.

Did we miss something?  Questions or suggestions?  Feel free to leave a comment below, mention us on Twitter (@PatentProgress), or email us: patentprogress[AT]ccianet[DOT]org

Roundup of This Week’s Patent News: June 20 Edition

Yesterday, the Supreme Court released its final patent opinion of the term, Alice v. CLS Bank.  This case should help clarify the patent eligibility of software, and improve patent quality, but we’re still going to need patent reform legislation to really fix the problems in the patent system that are exploited by patent trolls.  As Matt Levy explained in CCIA’s press release:  “This is an important tool in the fight against patent trolls, but it is not going to solve the problem.”

And last Friday, Matt elaborated more about the study CCIA released last week, which “found that PAE litigation has a strong negative impact on venture capital investment and startups.”

Did we miss something?  Questions or suggestions?  Feel free to leave a comment below, mention us on Twitter (@PatentProgress), or email us: patentprogress[AT]ccianet[DOT]org

MIT Professor Finds That, Yes, There Is a Patent Troll Problem

Patent reform may have stalled in the Senate, but the damage from patent trolls only continues to grow. A few weeks ago, Lex Machina released a report showing that patent assertion entity litigation is on the rise. And remember that day in April when patent trolls filed nearly 200 lawsuits?

And yet, we’ve continued to hear anti-reformers complain that the patent troll problem is overblown and overstated. All the evidence is anecdotal, they say.

Which is why CCIA commissioned a study by an MIT economist, Catherine Tucker. She used publicly available data and objective measures to examine the relationship (if any) between venture capital investment and patent litigation.

We released the study yesterday. Professor Tucker, using standard economic regression analysis, found that PAE litigation has a strong negative impact on venture capital investment and startups. Joe Mullin at Ars Technica has a nice explanation of the study’s findings.

Given the study’s conclusions, it’s no surprise that we’re seeing responses like this from patent trolls:

It’s certainly theoretically possible that a drop in venture capital investment causes patent trolls to file more lawsuits. But it’s hard to figure out how that might work. On the other hand, it’s easy to see how more patent troll lawsuits would discourage VC investment: more troll lawsuits means greater risk.

The truth is, patent trolls are continuing to damage American businesses, especially startups. The evidence is undeniable at this point.  And the Senate’s failure to provide relief, even after the House did so overwhelmingly, means that the tab will keep running up.

This is why we can’t give up on reform. While we may not have gotten over the finish line this year, the patent trolls won’t stop, and neither will we.