or Andrew Thompson
or Denis Keseris
To find out more
contact Matthew Howell
...The great patent giveaway
However, these “free” patents will come with significant
restrictions, as well as limitations on what the recipients
can do with patents that they develop for themselves. For
example, the patents can only be used defensively by their
recipients if they are sued for infringement. Perhaps more
important, though, is the fact that on joining the Google
program, companies will also be required to sign up for a
minimum of two years to the “License on Transfer” (LOT)
network.
Google’s initiative is seemingly motivated by its ongoing
quest to block the activities of patent trolls (organisations
which hold patents and use the threat of expensive patent
infringement lawsuits to negotiate financial settlements).
The LOT network is a Google founded network which
promotes sharing of IP and facilitates cross-licensing.
This network places few restrictions on the use of
intellectual property by rights holders within the network,
but restrictions do apply when a patent is sold to an
organisation outside the network. At that point, the buyer
must agree to license the patent on a royalty-free basis
to all of the members of the network. This of course limits
the commercial value of the patent, and means that the
company that invested its R&D efforts in developing the
patented technology would realise less reward from the sale
of its rights. However, it does also mean that patent trolls
are, in theory at least, prevented from asserting any patent
acquired from a member of the LOT network against other
LOT network members.
These recent developments demonstrate that intellectual
property rights, and patents in particular, can be used for
far more than blocking competitors. Companies like Tesla,
Toyota and Ford will hope that a controlled release of
patents to third parties may help to unlock lucrative future
markets, leading to the prospect of increased revenues,
whilst Google has shown that even when they’re being
given away freely, patents can represent an investment in
a company’s long term future, by making it a less attractive
target for patent trolls.
Companies seeking to take advantage of these patent
“giveaways” would be wise to remember that there is no
such thing as a free lunch, and to check the small print
before committing themselves.
IP review
autumn
2015
10
