Friendly intellectual monopolies... and trust in oxymorons
According to the Wall Street Journal Cisco Systems and IBM have already signed up.
RPX is funded by Kleiner Perkins Caufield & Byers and Charles Rivers Ventures. Its two chief executives, John Amster and Geoffrey Barker, previously served as vice presidents of Intellectual Ventures, another company in the business of purchasing patents.
It involves getting a bunch of tech companies to pay up, so that this new company, RPX Corp., can buy up a bunch of patents "for defensive purposes only." The company insists it won't sue anyone with these patents. But, of course, the whole thing makes you wonder. For the companies that buy into RPX's deal (or IV's for that matter), they end up spending a bunch of money for a rather weak form of insurance that protects them in the very rare case where they might be able to use a patent in either firm's portfolio to maybe, possibly protect itself against an infringement lawsuit.
NPEs typically troll the patent office, news reports, and company product lines in hopes of finding infringements to patents in its library. Once a product is targeted, the NPE sends a letter to the product's maker, threatening to sue the supposedly infringing company unless it pays a license fee or settles out of court.
RPX’s model borrows a little from Intellectual Ventures (where CEO John Amster hails from), but with a twist. Amster used to be in charge of patent acquisitions at Intellectual Ventures, which buys up billions of dollars worth of patents and then gets companies to license the entire portfolio. If companies decide not to play ball, the threat of massive patenet litigation hangs in the air.
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.
If you take a look at the RPX website you will see that as of today they have over 150 patents and more than 60 applications in their defensive portfolio and they have spent $40 million. This does not seem by any stretch of the imagination to be a worthwhile investment. It would seem that RPX has spent $40 million on 210 assets, or over $190,000 per asset.