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A recent entry at GitHub's blog caught my attention: https://github.com/LOT.

The "network" claims to provide protection from patent trolls by entering into an agreement automatically granting all members perpetual licenses to any patent assets sold to third parties.

The network's member list is quite impressive: Asana, Canon Inc., DropBox, Inc., GitHub, Inc., Google Inc., Khan Academy, Inc., Newegg Inc., Pure Storage Inc., Red Hat Inc., SAP SE, SAS Institute Inc., SolarCity Corp.

Membership fee schedule is based on annual revenue and heavily biased against small businesses:

<$10M           $1,500
$10M to $25M    $2,500
$25M to $50M    $5,000
$50M to $100M  $10,000
$100M to $1B   $15,000
>$1B           $20,000

Under the License On Transfer (LOT) Agreement, every company that participates grants a license under its patents to the other participants that becomes effective with respect to a particular patent when that patent is transferred to a non-participant, e.g., a patent assertion entity (PAE). This structure protects LOT participants from patent attacks by the non-participant (e.g., a PAE) to which the patent is sold while completely preserving the real business uses of a participant’s patent portfolio. The Agreement includes value-preserving provisions. For example, Transfers as part of a Change of Control to a Non-Assertion Entity or qualified M&A are carved out.

Would be nice to have any refs that may answer the following questions:

  • Is the agreement pro- or anticompetitive?
  • At what scale would it be effective against patent trolls?
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