Patent litigation from non-participating entities (casually known as "patent trolls") is the bane of a technology firm's legal department. Fighting patent lawsuits from firms that subsist completely on licensing and legal action is a frustrating waste of resources, and one that often stifles innovation indirectly. Now, a new partnership between Canon, Dropbox, Google, Asana, SAP and Newegg hopes to cut off would-be patent trolls at the knees. It's called the License on Transfer Network (LOT), and it's a patent-licensing agreement that neuters a patent's potential for litigation before prospective trolls can exploit it.
The companies' plan hinges on how patent sales are handled. Companies within the LOT network can sell each other patents under normal terms -- but if a participating firm sells their patents to an entity outside of the group, all other LOT members will be granted a royalty-free license to the technology. This means that if a patent is sold to a non-participating entity, LOT members will be protected from frivolous litigation. If a company never sells their patents, it is of course still free to protect it via litigation, but the group hopes the network will disarm trolls ahead of time. "As long as a company owns their patent, they retain all their rights to it," explained SAP's Anthony DiBartolomeo in the group's announcement. "The LOT Network helps protect innovative patent owners from unwarranted litigation without stifling valid, beneficial uses of patents, such as cross-licensing."
[Image credit: Brian Turner/Flickr]