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Software industry

Microsoft Takes Out Patent Insurance with RPX Membership

Strategic Insights

— 1 min read

Microsoft has joined the ranks of technology giants, including IBM, HP, and Cisco, by becoming a paying member of RPX Defensive Patent Aggregation. This move allows RPX to acquire patent rights before non-practicing entities (NPEs) can, effectively protecting Microsoft from patent trolls. RPX has been backed by investors such as Kleiner Perkins and Charles River, and has invested $130 million to acquire over 1,000 patents and patent rights in key sectors.

Key Takeaways:

  • RPX Defensive Patent Aggregation is a 14-month-old service that protects its clients from patent trolls by acquiring patent rights before NPEs can.
  • Microsoft has joined the ranks of IBM, HP, Cisco, and other technology giants by becoming a paying member of RPX.
  • RPX has acquired over 1,000 patents and patent rights in the mobile, Internet search, telecommunications, networking, and consumer electronics sectors.
  • The trolls, however, are ahead, having raised over $6 billion in private capital to acquire patents, resulting in a 300% increase in NPE-initiated lawsuits, representing ~16% of all patent litigation in the US.
  • Historical data suggests that patent litigation increases following an economic downturn.
  • One out of every five NPE cases filed last year involved software defendants.
  • Microsoft's annual membership fees range from $35,000 to $4.9 million, a fraction of the cost of a single assertion defense.

Statistics:

  • RPX has invested $130 million to acquire over 1,000 patents and patent rights.
  • The trolls have raised over $6 billion in private capital to acquire patents.
  • NPE-initiated lawsuits have increased by 300% in the last 10 years.
  • NPE-initiated lawsuits represent ~16% of all patent litigation in the US.
  • 1 in 5 (20%) of NPE cases filed last year involved software defendants.
  • RPX annual membership fees range from $35,000 to $4.9 million.

Sources:

  • RPX Defensive Patent Aggregation service
  • Kleiner Perkins
  • Charles River
  • Index Ventures
  • PatentFreedom
  • PC Magazine

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