Google Inc (NASDAQ:GOOG) has partnered with Dropbox and several other tech companies to battle patent trolls (non-practicing entities). Patent trolls are companies that buy old patents and tries to make money with them by accusing large companies of infringement. The patent trolls generally request a one-off licensing fee to end lawsuits. Many tech companies end up paying the fees because it is cheaper than defending the patent infringement claim. This is the reason why many people believe the patent system in this country is broken. Six companies have partnered to launch the License on Transfer Network (LOT Network).
The members of the LOT Network will retain full ownership and licensing rights of their patents, but agree to provide each other with royalty-free licenses should any of the patents ever be sold. This means that if Dropbox or Google sells a patent, the other members will receive a license to that technology. This would prevent them from being hit with lawsuits by the new patent’s owner. Other companies in the LOT Network include SAP, Newegg, Canon, and Asana. These companies hope the agreement will reduce patent trolling.
?The LOT Network is a sort of arms control for the patent world,? stated Allen Lo, deputy general counsel for patents at Google. ?By working together, we can cut down on patent litigation, allowing us to focus instead on building great products.?