SAN JOSE, Calif. A startup that claims it has a better approach for helping high tech companies deal with the rising costs of patent litigation and licensing has gained backing from two large venture capitalists. RPX Corp. announced it has received an undisclosed amount of equity investments from Kleiner Perkins Caufield & Byers and Charles River Ventures.
The startup is one of a growing number of companies sprouting up to address the problem of trolls, also known as non-practicing entities whose sole business is in acquiring and asserting patents, typically against large product companies. As many as 20 percent of the estimated 1,500 patent lawsuits filed in the first half of the year came from such companies, according to John Amster, co-chief executive of RPX.
Intellectual Ventures (Bellevue, Wash.), launched by former Intel and Microsoft executives in 2000, is said to be among the first and largest of the group of companies formed in part to address the troll issue. Investors in the company are reported to include Intel, Microsoft, Nokia and Sony.
In June another startup, Allied Security Trust, came out of stealth mode to describe its plan to buy, license and sell patents for its corporate investors including Cisco Systems, Ericsson, Google, Hewlett-Packard and Verizon. At that time, industry observers predicted it would be the first of many such collaborations.
A report in the Wall Street Journal suggested Intellectual Ventures is itself becoming troublesome for some large companies because it is demanding increasingly high licensing fees for a growing treasure trove of patents it has acquired. The article said RPX will try to carve out a business as an alternative, setting fixed fees for companies to license its patents.
John Amster, one of two former Intellectual Ventures executives that formed RPX, said he will not detail the company's business model or customers until October. However he did say RPX will acquire patents in a broad range of technology and e-commerce areas, especially when the patents are being asserted or involved in litigation.
"That's the area of most pain for companies," said Amster, who left his position as general manager of strategic acquisitions and licensing at Intellectual Ventures to form RPX.