As the Open Design Alliance gets busier and busier, I thought I'd get an update from CEO Neil Peterson. We talk about LOT Network, proxy objects, the latest APIs, and open cloud.
The Open Design Alliance announced last month that it had become a member of LOT Network, which holds 2.3 million patents. It protects firms when patents are sold, which is why LOT is short for “license on transfer.”
Sometimes, patents are acquired by patent assertion entities, also known as patent trolls, who use the patents to sue companies who might (or might not -- it doesn't matter) be using the technology described by the patents. Defense is expensive, costing as much as several million dollars, and so companies sometimes fold, paying the trolls what they want. An alternative is to join LOT Network.
Ralph Grabowski: I've read the material on LOT, but it is not clear to me how LOT protects members when patents are sold to a troll.
Neil Peterson: When a company joins LOT, it agrees that if -- and only if -- a member’s patent falls into the hands of a troll, a signed agreement goes into effect that grants all members of the community a license to the patent. With the license, member companies cannot be sued by trolls. All traditional uses of patents are not affected by LOT membership. This includes a company’s ability to enforce patents by suing other companies (including network members), asking for royalties, and selling them.
Grabowski: Was there an incident that caused the ODA to consider membership in LOT Network?
Peterson: We were doing our annual insurance renewals last year, and LOT membership came up as a checkbox on one of the renewal forms. We reviewed the organization and its mission, and found it was all upside: low membership fees, clear mission, and obvious benefits to member companies.
The terms of the LOT agreement only take effect when a patent falls into the hands of a troll. There are no restrictions placed on a company’s efforts to legitimately protect its IP [intellectual property] rights.
You can find the full article by the link.