Google wants companies to cross-license patents

Google offers four options for patent cross-licensing between companies

By Loek Essers, IDG News Service |  IT Management

Google has created a new website describing four types of patent cross-licensing agreements and is inviting other companies to vote on which one it should adopt.

"We think companies should cooperate to reduce patent litigation -- what's been compared to nuclear arms control for the patent world," wrote Google's legal director, Eric Schulman, on the company's public policy blog Tuesday.

To accomplish this, Google launched a website where it outlines four types of royalty-free patent licensing agreements, based on recent legislative proposals and some current approaches, that "increase companies' freedom to operate while reducing patent assertions, especially by trolls," said Schulman.

Patent trolls, also known as "non-practicing entities" (NPEs), are individuals and firms that own patents but do not directly use their patented technology to produce goods or services and instead assert their patent rights against companies that do. In 2011, patent litigation caused by NPEs cost U.S. software and hardware companies US$29 billion, a study from the Boston University School of Law found in June last year.

The problem of lawsuits caused by patent trolls is huge and getting worse, Schulman said. "Additionally, in a growing trend, companies are selling patents to trolls that then use those patents to attack other companies. In some cases, those companies arrange to get a cut of revenue generated from the trolls' suits," he added. Companies need to protect themselves against those practices, he said.

To do that, Google for instance proposes a License on Transfer (LOT) Agreement in which participating companies agree that when a patent is transferred, the transferred patent automatically becomes licensed to other participating companies, Schulman said. Google also proposed three other approaches:

--The Sticky Defensive Patent License (DPL), a nonexclusive, perpetual license that is irrevocable unless a licensee stops licensing its own portfolio under the DPL, or the licensee sues a DPL user offensively.

--The Non-Sticky Defensive Patent License, which automatically terminates both inbound and outbound licenses at the time a participant withdraws from the agreement. If a participant joins under outlined cross-licensing conditions and then regrets doing so, that participant can withdraw, terminating the DPL licenses at the end of the withdrawal notice period, Google noted.

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