Patent Law

In Patents We Trust

By Gary Odom and Jordan Kuhn

The Allied Security Trust is an alliance of computer-based technology companies, aimed at buying patents to avoid having them asserted against them. The entrance fee is $250,000, plus about $5 million in escrow. Verizon, Google, Cisco, HP are reputed founding members. The natural recruiting ground comprises members of the Coalition for Patent Fairness, the lobbying group for raising the cost of patent enforcement beyond the grasp of grasping inventors.

The Trust intends to hoover patents on the cheap, from distressed companies, universities, and individual inventors who don't know how to enforce them. This is similar to Intellectual Ventures (IV), headed by ex-Microsoftee Nathan Myhrvold. IV grants licenses to its clientele. IV also busies itself dreaming up new patents. IV owns an undisclosed number of patents, rumored in the thousands. While IV claims that litigation isn't part of its strategy, some corporate cowboys fear how that worm may turn.

The business model for the Trust is to resell acquired patents after granting members nonexclusive licenses, in something like a patent recycling program. Sounds like a boon for Ocean Tomo, patent auctioneer.

Brian Hinman, former IP VP at IBM, head honcho of the Trust: "It will never be an enforcement vehicle. It isn't the intent of the companies to make money on the transactions."

Hinman demurred at listing members of the select club. As always, discretion is the better part of valor.

Source: Wall Street Journal

Full post as published by The Patent Prospector on June 29, 2008 (boomark / email).