Google starts looking for allies in patent “self-help”

The search giant considers an industry-wide defensive licensing scheme.

by Joe Mullin - Mar 13 2013, 4:40pm EDT

• Patents

http://arstechnica.com/tech-policy/2013/03/google-starts-looking-for-allies-in-patent-self-help/

Google has been vocal about the "patent troll" problem for years now. It's an issue that has started to get serious attention from the government, and for good reason. Newest statistics show 61 percent of patent lawsuits are now filed by entities with no business outside patent-licensing, costing an estimated $29 billion each year in direct legal costs.
While many tech companies continue to push for a legislative fix to the problem, Google has decided to engage in some patent "self-help," as well. A new company initiative has synthesized some ideas that have been kicking around legal conferences for several months now about things that victims of patent trolls could do to help themselves.
One serious, and relatively new problem: many operating companies tend to keep "feeding the trolls," by selling off patents that end up in the hands of non-practicing entities.
"In a growing trend, companies are selling patents to trolls that then use those patents to attack other companies," writes Google lawyer Eric Schulman in a blog post on the new patent initiative. "In some cases, those companies arrange to get a cut of revenue generated from the trolls’ suits."
Google has faced that issue itself. British Telecom, for example, not only sued Google over patents directly, it handed off patents to Suffolk Technologies, a patent-holding company. That behavior caused Google to file its first patent infringement suit last month. In December, a holding company called MobileMedia Ideas won a jury trial, wielding patents from Sony and Nokia.
A new company website introduces four kinds of royalty-free patent licenses it suggests companies might use to combat the problem.

• License On Transfer Agreement: Under this agreement, every participating company would agree that when they sell their patents, they become licensed to the entire group. Companies could use their own original patents to fight each other, while they own them, but couldn't hand them off to anyone else.
• Non-Sticky Defensive Patent License (Non-Sticky DPL): This would simply stop companies from asserting their own patents against each other while they're participating in the license. Companies would be allowed to withdraw, and could then use their patents offensively; however, damages would not be available for the period in which they were in the pact. It includes a transfer provision, so if one company handed off a patent to a troll or other aggressor, the patent must first be licensed to all the DPL participants.
• Sticky Defensive Patent License (Sticky DPL): This is a permanent version of the defensive patent license, based on a proposal by Jason Schultz and Jennifer Urban, law professors at UC Berkeley. Once a company is in, all its patents are licensed permanently.
• Field-of-Use Agreement: Similar to the Open Invention Network, which provides free patent licenses to companies that agree not to assert any patents against the Linux system. One danger of using a license like this is that patent claims could be drafted to avoid whatever field of use is defined in an industry agreement. Certainly, the OIN's agreement hasn't stopped Linux-using companies from being attacked by trolls.

As a first step, Google is asking operating companies of any size to take a survey about which of these licenses, if any, appeals to them. It's gathering the responses by April 9. A lot of companies are thinking about the issue right now already, especially since the nation's antitrust regulators, the Federal Trade Commission and the Department of Justice, have asked for public comment to be submitted about what they call "patent assertion entities" by April 5.
Even if one of these agreements were widely adopted, it wouldn't affect some parts of the patent troll problem. Plenty of non-practicing companies use patents that originate with independent inventors, not big companies; some companies get into the patent-trolling business and then acquire their own patents, from their own research.
Still, a defensive patent license could hamper the ability to throw more and more intellectual property into a growing marketplace of patent "ammunition." Once-successful companies that are now struggling, or simply have expired patents or business lines, currently have a strong incentive to hand their patents off into the open market, where they can cause problems for competitors.
We're still a long way from a world in which companies give up the ideology of patents-as-swords and simply compete "on the merits of their products or services," but more companies and reformers are getting interested in taking some first steps.