Anti-Patent Troll Consortium Is Recruiting Blockchain Startups

Three blockchain technology companies have joined a multi-industry consortium dedicated to protecting members against the threat of patent assertion entities - more commonly known as patent trolls.

LOT's more than 400 members also include such household names as JPMorgan Chase, Ford, Microsoft, Tesla, Alibaba and GM. While the blockchain firms involved aren't as well-known, their participation is a sign that the technology is expected to become another patents battlefield, like the storied smartphone wars of the last decade.

Easily the best-known example of a firm lining up an arsenal of blockchain and crypto patents as a potential business model is self-professed bitcoin inventor Craig Wright's company nChain.

Wright, who was recently in the news for registering a copyright on the Bitcoin white paper, has amassed some 500 blockchain and crypto-related patents.

To borrow from a quote attributed to Pericles: Just because blockchain startups may not take an interest in patents doesn't mean patent trolls won't take an interest in them.

"However, it is important to understand that it is not just lawyers who have a stake in the patent troll fight. Developers, inventors and software engineers are already adversely impacted by frivolous litigation."

LOT's "Immunization" works like a poison pill: When members join they sign a 10-page agreement which states that if their patents ever fall into the hands of a patent troll then the rest of the community members get an automatic and free license.

The root of the problem, according to Seddon, is that companies at some stage of their lives sell patents in the open market, whether a startup with a handful of patents or Microsoft with 80,000.

"Patent trolls don't make products, they don't have factories or R&D centers. They are often nothing more than lawyers who have partnered with VC money to go around and buy patents and sue companies for shakedown money."

"The intersection of technologies opens us up to exposure to patent troll litigation, even if blockchain patents themselves are only now starting to grow in number."