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Software Patents: Start-up Sells Troll Insurance

So far Cisco and IBM are supporting RPX

There’s been Open Invention Network and Allied Security Trust, and now there’s RPX Corporation promising protection against the so-called patent troll. RPX, amusingly enough, was started by two refugees from what is widely perceived to be one of the biggest patent trolls around, Intellectual Ventures-founded by ex-Microsoft CTO Nathan Myhrvold (pictured).


RPX, which is backed by Kleiner Perkins and Charles River Ventures - and it must have been a tidy sum judging from the people working there - is acquiring patents. And for "annual membership fees" ranging from $35,000 to $4.9 million will sell high-tech companies term licenses - that turn into perpetual licenses in three years - so they can't get sued, or at least they can countersue.

But these are locked-in introductory rates at a discount with shorter vesting periods than RPX eventually intends to charge.

RPX calls itself a "defensive patent aggregator"; other people call it just another form of protection money. RPX maintains that paying it $5 million now will save you $20 million.

So far Cisco and IBM are supporting it.

RPX got started in March and says it's collected more than $40 million in patent rights described as 150 US patents and US patent applications in the mobile, Internet search and RFID markets from such as NextWave, LinkVision and Del Monte. It expects to acquire $100 million in patent rights its first year.

It says it won't enforce the patents it acquires - and not just against its members, the catch is it's servicing the needs of its supporters it what it buys. It also advises using multiple anti-troll measures.

RPX calculates that its team has previously been involved in $2 billion worth of patent-related transactions.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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