November 24th, 2008
RPX: Can it defend against patent trolls?
A startup on Tuesday will launch in an attempt to fix the current patent mess and defend against so-called patent trolls.
The startup–RPX Corp.–is a so-called defensive patent aggregator. RPX–short for Rational Patent–aims to reduce the costs associated with non-practicing entities (NPEs). These NPEs–known as patent trolls to you and me–acquire the rights to patents and then launch lawsuits.
RPX is more diplomatic in its press release, but that’s the general idea. IBM and Cisco are signed up with RPX, which has funding from Kleiner Perkins Caufield & Byers and Charles River Ventures. I had a briefing scheduled for today, but it appears the Wall Street Journal has spilled the beans. Here’s how the model works:
- Companies pay annual fees between $35,000 and $4.9 million.
- RPX buys patent portfolios to play keep away from patent trolls.
- Member companies benefit because the fees are less than what a court defense would costs.
Thus far, RPX has acquired more than $40 million in patent rights and will hit $100 million in its first year. The company, founded in March, counts John Amster, a former Intellectual Venures and Ocean Tomo executive, and Geoffrey Barker, founder of Cobalt, as co-CEOs.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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