Cisco, IBM join start-up to protect against patent trolls

Cisco and IBM have signed up as among the first members of start-up RPX Corp., established to protect

members against litigation from so-called patent trolls - a  derogatory term for companies that acquire and license intellectual property and assert them in court to win damages from vendor companies. RPX says it puchases key patents that could be used offensively against vendors. These patents are purchased into RPX's Defensive Patent Aggregation, which is then licensed in its entirety to its members for an annual subscription fee. According to the Wall Street Journal, RPX charges between $35,000 to $4.9 million, depending on a company's operating income. RPX also decides which patents to buy.

Cisco earlier this year was one of a string of network vendors, including Linksys, Foundry Networks, Extreme Networks and 3Com, that were sued by Network-1 Security Solutions for infringement of a remote power patent. Network-1 "acquires and licenses intellectual property "to maximize its value for the benefit of our investors and inventors," according to its Web site.

Cisco is very vocal in its fight for patent reform of what it describes as the "abuses" of the current patent system. According to a statement about patent reform on its Web site, Cisco states: "The patent litigation system today is unbalanced and patent speculators are exploiting the system's unfairness to coerce high settlements from productive companies. The patent litigation rules function less and less as a neutral system for resolving disputes, and instead encourage winner-take-all, jackpot-like strategies. These lawsuits rob our economy of billions of dollars that would otherwise be invested in jobs, innovation, consumer savings and shareholder value."

In February, a former Cisco patent lawyer Rick Frenkel outed himself as author of the blog Patent Troll Tracker, a vocal critic of  patent trolls.

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