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Major tech companies joining forces to create massive patent shell company

Nilay Patel

Yeah, we hate patent trolls as much as anyone, but the Wall Street Journal says that a group of major tech companies have created a patent shield organization to fend off trolls that sounds to us like it'll eventually just be an even worse troll. The foundation, called the Allied Security Trust, will take $250,000 in buy-in money and $5M in escrow from member companies -- Verizon, Google, Ericsson, HP, and Cisco are apparently the founding corporations -- and use it to buy up patents to prevent future litigation. After a member company buys a patent, it will grant itself a non-exclusive license and sell it to AST, which will then license it to the other members. Of course, that means that AST will eventually own a large number of patents on common technology, which means it could very well become a aggressive patent litigant itself. Not to worry, says AST CEO Brian Hinman: the group will "never be an enforcement vehicle," and it isn't anyone's intention to "make money on the transactions." Sure, sure -- but any time players this big start putting this much potential cash on the line, we're not going to take random promises at face value. See you in Marshall, boys.

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