 | |
| Formation | 2014 |
|---|---|
| Type | Nonprofit |
| Purpose | International trade |
Key people | Ken Seddon, CEO |
| Website | www |
The LOT (License on Transfer) Network is a nonprofit organization that was formed to combat patent assertion entities (PAEs), also known as patent trolls, by cross-licensing patents that fall into the hands of PAEs. [1]
LOT started as a Canon, Google and Red Hat-led initiative in 2014, and its founding members were mostly technology companies. Companies from other industries such as finance and automotive have joined the network to protect themselves from the growing threat of PAEs. [2] As of July 2020, LOT Network had more than 750 members and close to 2.5 million patent assets. Notable members of LOT include Google, Red Hat, Uber, Ford, Dropbox, Mazda, General Motors, Honda, CBS, Netflix, JPMorgan Chase, SAP, Microsoft, Tesla, Alibaba, the Wikimedia Foundation, and IBM. [3] [4] [5]
The number of patent disputes in the U.S. peaked in 2015, reaching 7,500 cases. According to Unified Patents, two-thirds of these cases were filed by patent trolls. [6] A study out of Boston University found that patent litigation results in direct losses of about $60 billion every year in the U.S. [7]
LOT members agree to mutual non-aggression pact in which they pledge that none of their patents will ever be used by a patent troll to sue another member; however, members can still sell patents and sue other members. Cross-licensing of LOT member patents is subject to certain "triggering" events. A triggering event takes place when a patent passes to a PAE, including scenarios in which a LOT company becomes a PAE or is absorbed by a PAE. After the triggering event, the specific patents involved in the event are automatically cross-licensed to all LOT companies, blocking any potential legal action by a PAE. By pooling their patents, member companies provide immunity to one another and deter potential lawsuits from patent trolls. [8] The group also benefits from a network effect: the more members that join, the more attractive membership becomes for other companies. [9]
LOT members pay an annual fee for network membership. The annual fee depends on company revenues, but ranges from $1,500 to $20,000 per year (about the price of a single patent application). [9] On September 1, 2016 LOT announced that it would waive annual membership fees until March 1, 2017 for companies with less than $5 million in annual revenues. [10] This fee structure facilitates membership for startups and smaller companies, which are also targeted by PAEs. [8] Over half of companies sued by PAEs make less than $10 million in revenue. [11] In the event that a larger LOT member acquires a smaller member, the acquired company can pass on its patent license rights to its acquirer. [10]
In 2022, LOT Network partnered with a group called Adapt (an acronym for "Advancing Diversity Across Patent Teams"), founded my leaders from Amazon, Cruise, Google, Disney, Meta, and Microsoft, to advance diversity and representation within the IP community. [12] The company also founded an initiative to create greater transparency among 5G patent holders. [13]
While LOT helps prevent patent trolling, it does not address low patent quality or hinder companies that attack competitors to stall progress and gain a competitive advantage. Daniel Nazer, a staff attorney at the Electronic Frontier Foundation praised LOT but added a note of caution: “It’s a targeted program that’s good for limiting the supply of patents to the very worst actors who use litigation to shake down people for settlements, but it doesn’t stop problems with patent quality and with operating companies attacking each other.” [9] The Electronic Frontier Foundation alleges that, ultimately, the patent system must be reformed to ensure that the U.S. Patent Office only grants patents for genuine inventions. [14]
Intellectual Ventures, a well known PAE, alleges that by buying patents they create a market for invention, thereby helping to revitalize inefficient companies and make innovation profitable. [15] Others, including Ira Blumberg – a former Rambus (a well-known PAE) employee – have countered that any value created by patent trolls is outweighed by settlement costs. [4]
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention. In most countries, patent rights fall under private law and the patent holder must sue someone infringing the patent in order to enforce their rights. In some industries patents are an essential form of competitive advantage; in others they are irrelevant.
Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational digital communications technology conglomerate corporation headquartered in San Jose, California. Cisco develops, manufactures, and sells networking hardware, software, telecommunications equipment and other high-technology services and products. Cisco specializes in specific tech markets, such as the Internet of Things (IoT), domain security, videoconferencing, and energy management with leading products including Webex, OpenDNS, Jabber, Duo Security, and Jasper. Cisco is one of the largest technology companies in the world ranking 74 on the Fortune 100 with over $51 billion in revenue and nearly 80,000 employees.
Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology from the person or organization that owns or holds it to another person or organization, in an attempt to transform inventions and scientific outcomes into new products and services that benefit society. Technology transfer is closely related to knowledge transfer.
The software patent debate is the argument about the extent to which, as a matter of public policy, it should be possible to patent software and computer-implemented inventions. Policy debate on software patents has been active for years. The opponents to software patents have gained more visibility with fewer resources through the years than their pro-patent opponents. Arguments and critiques have been focused mostly on the economic consequences of software patents.
Intellectual Ventures is an American private equity company that centers on the development and licensing of intellectual property. Intellectual Ventures is one of the top-five owners of U.S. patents, as of 2011. Its business model focuses on buying patents and aggregating those patents into a large patent portfolio and licensing these patents to third parties. The company has been described as the country's largest and most notorious patent trolling company, the ultimate patent troll, and the most hated company in tech.
In international law and business, patent trolling or patent hoarding is a categorical or pejorative term applied to a person or company that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or contribution to the prior art, often through hardball legal tactics. Patent trolls often do not manufacture products or supply services based upon the patents in question. However, some entities which do not practice their asserted patent may not be considered "patent trolls" when they license their patented technologies on reasonable terms in advance.
Open Invention Network (OIN) is a company that acquires patents and licenses them royalty-free to its community members who, in turn, agree not to assert their own patents against Linux and Linux-related systems and applications.
Opposition to software patents is widespread in the free software community. In response, various mechanisms have been tried to defuse the perceived problem.
An intellectual property broker mediates between the buyer and seller of intellectual property (IP) and may manage the many steps in the process of creating a deal with regard to the purchase, sale, license, or marketing of intellectual property assets. This may include: patents, trademarks, or inventions (prototypes).
MagicJack is an Internet-based telephone service (VoIP) provider in the United States and Canada. It offers nationwide VoIP and cellphone services.
Vuestar Technologies Pte Ltd is a Singapore-incorporated subsidiary owned by Australian parent Goldspirit Investments Pty Ltd. The owner of both companies, Ronald Neville Langford, applied for a number of patents around the world relating to search techniques using hyperlinked images to other websites or web pages.
PatentFreedom is an on-line community of companies that access and share information about non-practicing entities that own and enforce patents primarily to collect license fees. The company offers membership to operating companies as well as law firms representing them. The company was founded in May 2008.
RPX Corporation is an American provider of international risk management services for patents. The company was founded in March 2008, and is based in San Francisco. It was incorporated on July 15, 2008. By acquiring patents that pose potential problems and providing information on litigation, RPX seeks to reduce patent assertions directed at its clients.
Defensive patent aggregation (DPA) is the practice of purchasing patents or patent rights to keep such patents out of the hands of entities that would assert them against operating companies. The opposite is offensive patent aggregation (OPA) which is the purchasing of patents in order to assert them against companies that would use the inventions protected by such patents and to grant licenses to these operating companies in return for licensing fees or royalties. OPA can be practiced by operating companies or Non-Practicing Entities (NPEs)
Patent monetization refers to the generation of revenue or the attempt to generate revenue by a person or company by selling or licensing the patents it owns. According to a 2006 survey of patent owners at the European Patent Office, about half of small and medium-sized enterprises (SMEs) take patents for monetary reasons.
Facebook is a social networking service originally launched as FaceMash on October 28, 2003, before changing its name to TheFacebook on February 4, 2004. It was founded by Mark Zuckerberg and college roommates and fellow Harvard University students, in particular Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and gradually most universities in the United States and Canada, corporations, and by September 2006, to everyone with a valid email address along with an age requirement of being 13 and older.
Article One Partners (AOP) is an online prior art search and intellectual property research crowdsourcing community. AOP was acquired by RWS Group in October 2017 and the AOP Connect crowdsourcing platform is now part of the IP Research group within RWS. RWS IP Research provides crowdsourced prior-art-search services by utilizing an online research community. The company's President stated that, as of June 30, 2018, AOP comprises "more than 40,000 in over 170 countries."
Graphiq is a semantic technology company that uses artificial intelligence to rapidly create interactive data-driven infographics. Its intent is similar to Wolfram Alpha which is designed to provide users with direct information on a variety of subjects rather than going through a search engine.
Unified Patents is a member-based organization whose goal is reducing the number of non-practicing entity (NPE) assertions in specific technology areas.
Nomadix is a Woodland Hills, CA-based developer of network gateway equipment, used by hotels and other businesses to deliver Internet access to end users.
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