Beating patent trolls at their own game

Saul Hansell's piece in the Times is called Trolling for Patents to Fight Patent Trolls. Kinda like a war for peace.

Saul Hansell's piece in the Times is called Trolling for Patents to Fight Patent Trolls. Kinda like a war for peace.

At a recent patent auction in San Francisco, which in general didn't go that well for the auctioneers, one company that was snapping patents up was RPX Corp., backed by Kleiner Perkins and Charles River. It spent $300,000 on a patent on viewing media on removable media. RPX doesn't make anything, doesn't market anything. Typical patent troll, right?

Not so typical.

“We are not buying patents to monetize them,” said John Amster, the co-chief executive of RPX. “What we are doing is ‘defensive patent aggregation,’ and no one else is doing that as a business in itself.”

Rather than suing the Deep Pockets, RPX invites them to be members of the company at a cost of $300,000 to $5 million. Then the company snaps up strategic patents to defend its members against trollish claims. It plans to spend $100 million this year, which is not enough to "buy everything."

“We don’t expect we are going to be able to buy everything,” Mr. Amster said. “There are times when we have to tell people, ‘We’re sorry we can’t do that deal. We’ve already spent enough on you and we have to spend our money on other areas.’ ” He argues that this won’t deter members.

“We only need to buy one or two things a year, that are true threats to people in order to justify our fees,” he said. If companies don’t like the way RPX is running its portfolio, they can choose not to renew their membership, and they will still be able to keep the licenses to the patents bought while they were members.

Members so far: IBM, Cisco, Panasonic, Philips, LG Electronics, Samsung, and TiVo.

So should inventors sell to a good troll like RPX or a bad troll like Acacia Research. It's just a risk-reward analysis, says Paul Ryan, Acacia's CEO.

“If they want to get quick cash, and the price is right, they have the right to sell,” to a company like RPX, he said. “To get a larger amount, but to take some risk and time, usually it makes sense to partner and get more value for their intellectual property.”

The two companies recently inked a patent-licensing deal.

[Acacia] unit Light Valve Solutions LLC, has entered into a license agreement with RPX Corporation covering a patent portfolio that relates to light valve systems.

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