Patent trolls beware: Some of the tech industry's biggest names are banding together to run you out of court.
According to a report in The Wall Street Journal, tech giants Cisco, Google, Verizon and HP are working with other companies to form the Allied Security Trust, a group that will buy intellectual property assets before they can be purchased by patent-holding firms. Companies will pay around US$250,000 to join the trust and will each deposit $5 million into a joint pool to purchase future patents for the trust, The Journal reports.
The tech and telecom industries have both been plagued in recent years by several patent suits filed by patent-holding companies that do not actually produce any of the technology whose rights they own. Because these companies often acquire patents for technologies years before any such technology can feasibly come to market, critics refer to them as "patent trolls" who they say are sponging off the work of other companies.
The most prominent such case involved a patent-holding company named NTP that successfully sued BlackBerry maker Research in Motion for infringing upon its patents for e-mail-to-mobile device technology. Just one year after RIM agreed to pay NTP a US$612.5 million settlement, NTP proceeded to sue Verizon, AT&T, Sprint Nextel and T-Mobile USA for infringing upon five of the same patents.
Earlier this year, patent-holding firm Minerva Industries filed suit against 33 different companies on the same day that the United States Patent and Trademark Office granted it a patent for "mobile entertainment and communication devices" that have "a cellular or satellite telephone capable of wireless communication with the Internet." In other words, Minerva sued every company major company involved in the design, production or sales of smartphones, including RIM, Apple, Motorola, Nokia, AT&T Mobility, Alltel and Samsung. Two months prior to the Minerva suit, Canadian wireless network vendor Wi-LAN sued Apple, Dell, HP and 19 others for allegedly infringing on its Wi-Fi technology patents.