Tech giants link arms with startups against patent trolls

A group of big names in tech is trying again to stem the ravages of patent trolls by forming a mutual non-aggression pact.

Google, Canon, SAP, Dropbox, Newegg, Pure Storage and Asana are the foundation members of Lotnet – the License on Transfer Network – and they hope to attract other tech players to the fold.

While it's only been announced today, there seems to have been some stealth-mode work going on for most of this year: the first four companies in the list signed their agreements on 31 January 2014.

The agreement is that if any company in Lotnet sells its patents, all other companies in the network will get a royalty-free license to use the IP. That would protect members of the network from being pursued if a patent sale ended up with the patents in the hands of a troll.

“That means that companies retain their right to enforce a patent so long as they retain ownership of it. However, as soon as it is sold, a license to the other members becomes effective, protecting them from attacks by the troll to which the patent was sold”, the group's announcement explains.

Coverage isn't absolute: there are “carve-outs for certain M&A transactions and change of control”.

With Google, Canon and SAP in the list (the first two described by Bloomberg as the US's two top patent recipients in 2013), it's perhaps not surprising that the group claims coverage of 300,000 patents and total revenue over $US117 billion.

Membership of Lotnet costs between $US1,500 and $US20,000 annually depending on revenue. ®