Google, Dropbox, and others team up to cut patent trolls off at the source

Despite its high profile in the tech world, patent trolling — in which companies sue for damages over patents they don't intend to use — has been difficult to address. Reform efforts in Congress stalled earlier this year, when Sen. Patrick Leahy (D-VT) failed to broker an agreement that would have raised the bar for sending patent infringement warnings and increased the risks for bringing a frivolous lawsuit. In the wake of this defeat, Google, DropBox, Canon, and others are forging a truce that they hope will stop trolls from building a patent arsenal.

The License on Transfer (LOT) Network is a coalition of seven companies that, according to the site, hold 50,000 issued US patents and 300,000 total patent assets between them. It's intended specifically to combat patent assertion entities, the nebulous companies that buy large numbers of patents and use them to reach settlements. Even if the patent doesn't exactly fit the case, settling is often cheaper than fighting a suit, and unlike companies that manufacture their own products, they can't be countersued in defense. The LOT Network can't help with patents these businesses already own, but they could defuse new ones. Any time a member sells one of its patents to a non-member, all other member companies are granted a license to use it. If a member is outright acquired by a patent assertion entity — as opposed to another hardware or software company — other members will be granted a perpetual license to its entire portfolio.