Cisco, others create organization to protect against patent suits

Cisco is among several vendors banding together to fend off wayward patent licensing organizations, reports the Wall Street Journal. Patent trolls, as they are lovingly referred to by industry insiders, are companies that buy intellectual property with the hope of licensing it to others. Firms like Intellectual Ventures, a company founded by a former Microsoft exec, is one example. Giants such as Nokia, Intel, Apple, Sony are all reportedly investors of various such patent organizations. Problem is, some of these patent organizations are at least as interested in suing corporations with deep pockets, claiming patent infringement, as they are in licensing IP.

NTP, for example, brought a lawsuit two years ago against Research in Motion which nearly shut down RIM's e-mail service. RIM settled with NTP for $612.5 million.

A counter venture has been announced today, the Allied Security Trust. The WSJ reports that members include Cisco, Ericsson, Google, Hewlett-Packard and Verizon Communications. This organization wants to be first to buy patents that are likely to be used to bring infringement claims against its members. The story reports that members pay $250,000 to join the group and each will put about $5 million into a pot to buy licenses to such patents. Apparently, this arrangement skirts antitrust rules because the group won't own the patents and isn't buying them to make a profit from them, reports the WSJ's Law Blog.

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