Patent Law

"Coalition for Patent Fairness" morphs into Allied Security Trust?

By Lawrence B. Ebert, Esq.

Several tech-industry heavyweights are banding together to defend themselves against patent-infringement lawsuits. Their plan: to buy up key intellectual property before it falls into the hands of parties that could use it against them, say people familiar with the matter.

Verizon Communications Inc., Google Inc., Cisco Systems Inc., Telefon AB L.M. Ericsson and Hewlett-Packard Co. are among the companies that have joined a group calling itself the Allied Security Trust.

The WSJ also stated:

The new Allied Security Trust aims to buy patents that others might use to bring infringement claims against its members. Companies will pay roughly $250,000 to join the group and will each put about $5 million into escrow with the organization, to go toward future patent purchases, the people familiar with the initiative said.

Tech companies have tried various ways to protect themselves, including investing in Intellectual Ventures LLC, a patent-holding firm founded by former Microsoft Corp. executive Nathan Myhrvold. The companies provide money to help Mr. Myhrvold buy patents, and he in turn grants them a license to his portfolio. But some in the tech industry fear Mr. Myhrvold's venture, which has collected thousands of patents in areas such as networking and software, may itself become an aggressive patent enforcer down the road. Mr. Myhrvold has said litigation isn't part of IV's strategy, but hasn't ruled it out.

CNET, discussing the WSJ piece, stated:

Allied Security Trust isn't intended to be a revenue generator for the companies involved, but rather a protective shield against patent trolls big (Intellectual Ventures, which was recently torched in The New Yorker) and small (Acacia).

Will it succeed? Who knows? But any efforts intended to bring some sanity to the patent-litigation racket are very welcome.

IPBiz notes this as further evidence that the issue was NOT "patent quality," but simply "patent damages." Patent quality, and the (fantasy) high grant rate of Quillen and Webster were merely props to get to patent damages. Nobody in the CPF really cared about patent quality.

Full post as published by IPBiz on June 30, 2008 (boomark / email).