Tech Companies Create Alliance To Fight Patent Terrorism

Google, Cisco, Verizon, Telefon, Ericsson and Hewlett-Packard have partnered to create a shell company dubbed the Allied Security Trust. The shell company intends to buy up key intellectual property so that patent terrorists (our term –Ed.) can’t hold them hostage for broad and ambiguous patents issued by the US government.

Aside from the inane lawsuits that attack Apple and others at least once a week, the real danger lies in unctuous law firms who buy up obscure patents in hopes to blackmail huge corporations into settling for big bucks. Research in Motion, makers of the ubiquitous Blackberry mobile device, was forced to pay a $612.5 million settlement in 2006 to NTP Inc., a tiny Virginia firm that held ridiculously broad patents related to wireless email delivery, but had never manufactured a cell phone/email device. Unless a settlement was reached, RIM would have been forced to shut down their service affecting millions. The outcome was a serious wake up call to the technology industry, and inspired more disgusting legal teams, called patent trolls by some, to begin snatching up patents from companies going out of business, universities and individual inventors in hopes of cashing in on their own public beheadings.

The Coalition for Patent Fairness, a group of technology and financial-services companies that has lobbied for patent legislation in Washington, says the number of patent-related lawsuits rose to nearly 2,500 through October of last year from 921 in 1990.

The new Allied Security Trust aims to buy patents that others might use to bring infringement claims against its members. Companies will pay $250,000 to join the group and will each put about $5 million into escrow with the organization, to go toward future patent purchases.

The Allied Security Trust announcement did send shivers down a few industry watchers who feel that the group could eventually become the exact type of entity that they formed to fight.

To head off such concerns, companies in the new group will sell the patents they acquire after they have granted themselves a nonexclusive license to the technology. “It will never be an enforcement vehicle,” said the group’s chief executive, Brian Hinman, a former vice president of intellectual property and licensing at International Business Machines Corp. “It isn’t the intent of the companies to make money on the transactions.”

The Future: Who’s watching the watchmen?

Author: FutureMusic

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