If you’re a start-up looking for a big no-cost licensing opportunity, you’ll want to check out Google’s Patent Starter Program. It offers start-ups free Google patents. You’ll also get the ability to view Google’s entire portfolio with the option of licensing additional patents. The catch is you’re required to join Google’s License on Transfer (LOT) Network.
The LOT Network has over 325,000 patents. It’s a patent cross-licensing organization that includes Canon, Dropbox, Google, SAP, and others. The Network was created to reduce the number of patent infringement claims from trolls against technology companies. To widen its cross-licensing initiative, Google is opening the LOT network database, giving access and support to start-ups interested in commercializing the patents.
If you’re not familiar with cross-licensing, it’s an agreement between two or more IP owners where each one gives the other rights to their intellectual property. Usually the IP that each party owns covers different aspects of a product or technology. Cross-licensing is a relatively low-risk way for two IP owners to exchange intellectual property so each can make money without infringing upon the other. It’s also a strategy that’s used to settle patent disputes and for developing new relationships and partnerships.
Many industries, such as high tech, use cross-licensing frequently because they have such large IP portfolios and cannot practically avoid infringing on each others patents.Smartphone manufactures, such as Samsung, Nokia and others are examples of technology companies with patents, that if commercialized, will infringe upon the other. They agree to exchange these rights, allowing each company the freedom to make and sell their smart phones covered by the others patents without causing a patent infringement lawsuit.
To qualify for the free patent license, your start-up has to generate between $500,000 and $20,000,000 in revenues. The free patents are limited to the first 50 eligible startups to enroll. Once accepted, you’ll be given access to the Google patent portal, two years of free membership in the LOT program, and two patents with no usage fees — but you’ll most likely have to pay the maintenance fees.
Keep in mind the program does have some significant fine print limitations. Once you’re approved, you’ll receive a list of three to five patents based on your business focus (as evaluated by Google). But you’re only allowed to choose two from that list. If they aren’t right for your goals, then you don’t get other patents to choose from. If you leave the program before the two years are up, the patents revert back to Google.
Why is Google offering startups free licenses to its patents? It’s a licensing strategy designed to reduce litigation risk. Each member of the network cross-licenses their IP to each other. Then Google licenses out the the portfolio of cross-licensed patents to start-ups who in in turn become part of a bigger network. By being part of a “big licensee network”, there’s less risk of costly litigation (at least in theory), enabling start-ups to focus on getting the patents into the commercial marketplace.
Lear more about the Google Starter Patent Licensing program at their website http://www.google.com/patents/licensing/.