Monday, November 24, 2008

Cnet, among others, reports on RPX,
a San Francisco-based start-up, calls itself a "defensive patent aggregator." The company plans to buy available patents to keep them out of the hands of "patent trolls," or firms that obtain patents for the purpose of suing other companies for royalties or licensing fees.

RPX will sell memberships to companies for a fixed annual fee that could range from $35,000 to $4.9 million, depending on the member company's operating income. For the price of the annual membership, companies will receive the patent licenses purchased by RPX. The Wall Street Journal reported that Cisco Systems and IBM have already signed up.

Several considerations seem to be important here:
1. Third-party management of patent risks is becoming a legitimate business model.
2. The market for patents is going to be more liquid, i.e. it will be easier to buy and sell patents.
3. Deverticalization of the innovation supply chain will accelerate.
4. In the long run, people will start looking for process improvements, i.e. better, more efficient ways to create inventions.
5. Patent evaluation methods will have to improve dramatically too.

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