« Doubled Over | Main | Debauchery »

June 29, 2008

In Patents We Trust

The Allied Security Trust is an alliance of computer-based technology companies, aimed at buying patents to avoid having them asserted against them. The entrance fee is $250,000, plus $5 million in escrow. Verizon, Google, Cisco, and HP are reputed founding members. The natural recruiting ground comprises members of the Coalition for Patent Fairness, the lobbying group for raising the cost of patent enforcement beyond the grasp of grasping inventors.

The Trust intends to hoover patents on the cheap, from distressed companies, universities, and individual inventors who don't know how to enforce them. This is similar to Intellectual Ventures (IV), headed by ex-Microsoftee Nathan Myhrvold. IV grants licenses to its clientele. IV also busies itself dreaming up new patents. IV owns an undisclosed number of patents, rumored in the thousands. While IV claims that litigation isn't part of its strategy, some corporate cowboys fear how that worm may turn.

The business model for the Trust is to resell acquired patents after granting members nonexclusive licenses, in something like a patent recycling program. Sounds like a boon for Ocean Tomo, patent auctioneer.

Brian Hinman, former IP VP at IBM, head honcho of the Trust: "It will never be an enforcement vehicle. It isn't the intent of the companies to make money on the transactions."

Hinman demurred at listing members of the select club. As always, discretion is the better part of valor.

Source: Wall Street Journal

Posted by Patent Hawk at June 29, 2008 6:32 PM | Patents In Business


Are there any antitrust issues?

Posted by: query at June 29, 2008 6:14 PM

Antitrust? What is that? You some kind of pinko?

These are major corporations, the lifeblood of this great nation, God Bless America, taking care of business, sweeping up patent detritus. You let them two-bit inventors and prancing patent trolls keep their inventions, and all hell gonna break loose. It already has. Bad for business.

The courts have done their bit: getting rid of injunctions, making claim construction a real crap shoot, everything being obvious. Now it's time for the big boys to tidy up the mess left behind.

Posted by: Patent Hawk at June 29, 2008 7:23 PM

This is GOOD news for change. They are actually BUYING the patents instead of trying to legistlate them out of existence.

It's ironic - for YEARS the Intels and Ciscos have been crying about being sued for patents bought for $50,000 - what, Intel cant afford to BUY the patent for $50 K? What, Intel cant afford a staff of analysts to find the ones to buy??? What is Intel's market Cap these days? (the same comment applies to Cisco, M$, etc etc)

My concern - this is a temporary measure (i.e. actually paying for the IP) until the CPF redoubles its efforts in 2009.

Posted by: anonymousAgent at June 29, 2008 10:01 PM

Lovely news..

I guess they need to make a long list of all patented technologies they stole and sort this list not by the importance of respective patents but by the status and current financial curcumstances of the patent owner. At the top of the list will be universities and some R&D companies. At the very bottom of the list will be all those garage inventor punks who invent on their own dime.

patent "fairness" at work

Posted by: angry dude at June 30, 2008 9:07 AM

"The courts have done their bit: getting rid of injunctions, making claim construction a real crap shoot, everything being obvious."

P you seem so bitter about KSR. I guess a lot of your patents are getting KSRed? As to prosecution KSR changed little in my AU, people are still allowing applications and I can allow pretty much anything that doesn't have art nailing it in no uncertain terms.

Posted by: e6k at July 1, 2008 5:35 PM

Hi e6k:

Thanks for reading and commenting.

Your comment about KSR bitterness is an emotional projection on your part, with no basis in fact.

KSR was an extralegal ruling, beyond the law. I've covered that since the ruling came out. Not that SCOTUS will be caught out on it by the nitwits that comprise Congress.

I'm still getting patents.

What I'm not getting is decent examination. PTO examination is generally disgraceful, with some exception.

Posted by: Patent Hawk at July 1, 2008 6:52 PM

"PTO examination is generally disgraceful, with some exception."

Hawk, you're too mild in your critique of the current state of examination.

Posted by: JD at July 2, 2008 5:27 AM

"KSR was an extralegal ruling, beyond the law. I've covered that since the ruling came out. Not that SCOTUS will be caught out on it by the nitwits that comprise Congress."

I must say that I could agree with you on that one, but like JD and the rest of you love to say about common law: "it is the law". This happens to be the law as handed down from the highest court in the land. Besides, what exactly is it that you think is obvious? Strict TSM? I don't see anything strictly in the statute about TSM. The courts created it and the courts struck it down a notch. Personally, I don't see how you can be quite so upset about it. An observation about your reaction which, while perhaps an emotional projection, it is merely an observation of your turning to such talk as "obzilla" etc to describe the situation. And I say I don't see how you could be so upset after having read if not all, the majority of your coverage of the matter. From your first post on the subject you indirectly appeal to prior common law, which doesn't usually supercede the SCOTUS making a judgment that is "more specific" than, or "further clarifies", what was said before. And you also appeal the judgments you make based on your reading of KSR rather than perhaps what it was actually meant to say. All in all, your comments on the subject are helpful, but they reveal very little in terms of independent thought, you seem to be quite content to graze upon the field laid out for you by the Fed. Circ.

It is my humble opinion, that SCOTUS should have just come out and said it. Obviousness is a judgment call when combinations of old elements are all that are involved.

Posted by: e6k at July 2, 2008 2:26 PM

I should add, you seem very concerned about the SC "destroying" or "taking away" property from people through KSR and the ruling about eminent domain. I have to wonder why you are so concerned about them taking property in the patent arena (as opposed to the real estate arena) when all they are doing is saying that the "property" was improperly granted in the first place. I.e. the patent office and/or the courts made a mistake in telling people that they had a right to claim x piece of subject matter as their property. I don't really see how this is a problem, it is not strictly the patent office, nor the court's responsibility to claim only that which is their property. The only "problem" that arises is that people who are gaming the system's over reliance on a strict standard are curtailed in their ability to do so. Why this would be a "bad" thing I cannot fathom. By a "bad" thing I mean a bad thing overall, I'm not merely refering to what might be bad for a certain individual.

Posted by: e6k at July 2, 2008 3:51 PM

KSR is the law. Bad law, unfortunately, but the law nonetheless. Just like Kelo.

Posted by: JD at July 3, 2008 7:41 AM