Google lends hand in NPE fight
Google is backing a US start-up that is recruiting companies to collectively deter legal threats, especially from non-practising entities (NPEs).
Unified Patents will pool its members’ resources to fight NPEs, which typically acquire patents in order to license or enforce them. Unified says it is specifically targeting small tech companies, as they’re easy targets for NPEs.
According to a report in The Wall Street Journal, Google and NetApp, which makes data-storage hardware, are Unified’s first clients. The company hasn’t disclosed membership fees but says it will charge larger companies higher fees than smaller ones.
Unified wants to make it more expensive and risky for NPEs – also known as ‘patent trolls’ – to assert their patents. One strategy is to pinpoint specific technology fields to be defended, allowing companies to more easily track relevant patents within these industry pools.
Additionally, Unified wants smaller members to warn larger companies when they receive NPE licensing offers or legal threats. This idea, Unified says, could trigger countermoves from the larger members, including buying the small company’s portfolios or seeking to invalidate the NPEs patents.
Trying to invalidate patents is a commonly-used strategy today but Unified believes taking action as early as possible can make licensing or litigating more expensive and less attractive for NPEs.
Peter Corless, partner at Edwards Wildman Palmer LLP, said defendants typically cooperate during litigation but Unified’s approach appears innovative, allowing companies to pre-empt lawsuits.
“I’ve not heard of this approach before. I would need to see a breakdown of the business model, but it is an interesting approach, showing that defendants are trying to reduce their costs anyway that they can. It makes sense.”
Mike Powell, shareholder atBaker Donelson Bearman Caldwell & Berkowitz, PC, added:
“It’s interesting to see this creative effort emerge. There is a lot of work involved in evaluating what is and is not covered by a patent and whether the patent can withstand litigation, including challenges to its validity. Efforts to collectively tackle the work and share the costs involved are worth exploring.”
Asked what Google’s impact on the group might be, Powell said it might provide strong support owing to its substantial patent portfolio.
But he said: “It really depends on what Google is willing to share and whether Google has patents that might serve as prior art to help invalidate patents asserted by NPEs. The challenge, however, remains predicting the particular patents and technologies potentially at issue. There are so many that it is difficult to narrow those that are relevant, and worth investigating further, from those that are not.”
A Google spokesman said: “Patent trolls hurt consumers and small businesses by taxing innovation, raising prices and reducing choice. We support Unified Patents’ innovative effort to address the troll problem."
Industry efforts to tackle NPEs follow a bill launched by two US congressmen which, if adopted, would force defeated NPEs to foot the bill in lawsuits. The Shield Act, according to its sponsors Jason Chaffetz and Peter DeFazio, would deter frivolous NPE litigation.
