RPX Corporation, a defensive patent aggregator, today introduced a new service for technology companies that will reduce the rapidly escalating risks and costs created by non-practicing entities (NPEs). NPEs acquire patents - as opposed to creating them through research and development - solely for the purpose of offensive licensing against operating companies. In contrast, RPX acquires patent rights and provides them as a defensive patent aggregation to members for an annual membership fee.
IBM and Cisco are the first members of the new RPX Defensive Patent Aggregation, which is the first privately financed defensive patent service. Kleiner Perkins Caufield & Buyers and Charles River Ventures financed RPX.
In the last decade, NPEs have raised over $6 billion in private capital to acquire patents to use offensively against companies that manufacture and sell technology products and related services. Offensively initiated lawsuits by NPEs grew nearly 300 percent during this period and now represent 16 percent of all patent litigation in the U.S., according to PatentFreedom. The problem is likely to grow worse, as historical data suggest that patent litigation increases following an economic down-turn.
RPX annual membership fees range from $35,000 to $4.9 million. The fees are typically a fraction of what a single assertion defense often costs.
"Our sole mission is defense - providing a counterweight to the billions of dollars invested to build offensive portfolios," said John Amster, RPX co-CEO. "We're buying portfolios that would become threats to our members and we guarantee that we will not assert or litigate the patents we acquire."
Because RPX provides a fixed-fee broad license to everything it buys, does not increase its fees based on the size of the RPX aggregation, and will not litigate, RPX's interests are fully aligned with its members.
"This alignment of interests ensures that technology companies will be able to justify their membership fees year after year," said Amster.
The RPX Difference
RPX is the industry's first defensive patent aggregator. It is unique in four ways:
Since its founding in March this year, RPX has acquired more than $40 million in patent rights - 150 U.S. patents and 50 U.S. patent applications in the mobile, Internet search and RFID markets - and is on track to acquire $100 million in patent rights in its first year.
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