Patent Law

Brass in Pocket

By Gary Odom and Jordan Kuhn

RPX is a patent troll basher that is putting it's money where it's mouth is. RPX, a self-titled "defensive patent aggregator," is buying patents to keep them from being asserted against its pals. RPX's initial pals are IBM and Cisco.

The RPX business model is getting its members to pony up membership fees as patent infringement insurance: $35,000 for Joe's Roach Sandwiches or General Motors (same difference, if you're talking business viability), to $4.9 million for the Big Boys with big fears. Because $5.0 million would be bit rich. But a helluva bargain at $4.9.

Initial funding for the PBX hustle is from vulture capitalists Kleiner Perkins Caufield and Byers and Charles River Ventures. Must have been one slick business plan.

Allied Security Trust (AST) is running a similar game, but more like an orphanage. What do you expect from a non-profit startup in Poughkeepsie, NY. Members tuck bucks in escrow, and are "consulted" to see if they want to chip in on purchasing a portfolio. AST claims to have roped in 15, with a goal of 30 to 40. While being discrete, word on the street is that Google, Verizon, HP and Cisco are scoping out orphans.

RPX co-CEO's John Amster & Geoffrey Barker are Intellectual Ventures alumni, which has its own mystery meat patent stew that it's cooking.

RPX claims to have acquired 150 patents and 50 patent applications so far. So now its members can make and sell crustless sandwiches with gleeful abandon.

RPX hasn't said whether it plans to use its acquisitions as leverage to encourage membership. Marketing advice: since you're a fear dealer, go with the carrot and the stick. Suggested marketing slogan: "Pay the toll or be trolled." Not to mention the tidy irony.

Yo, RPX, call Patent Hawk and Hoover up some of my portfolio. Too late to save the slobbering Gorilla, but so it goes.

Source: WSJ

Full post as published by The Patent Prospector on November 24, 2008 (boomark / email).