SAN JOSE, Calif. Intel Corp. has joined the patent aggregation service of RPX Corp. (San Francisco). The startup claims the move by the world's largest semiconductor company comes at a time when patent suits are on the rise.
Palm Inc. and four small software security companies also signed on to the service, bringing to 35 the number of members RPX has signed up since it was formed in November 2008. To date RPX has spent more than $200 million to acquire more than 1,300 patents and patent rights in areas including mobile, Internet search, telecommunications, networking, consumer electronics, and e-commerce.
RPX uses those rights to defend its members against patent assertion and litigation by non-practicing entities (NPEs) also called patent trolls that buy and assert patents as their primary business. The startup claims NPEs filed 467 patent suits in the U.S. in 2009, up 30 percent from 2008.
Technology companies spent more than $3 billion on such suits in 2009, RPX claimed. RPX members pay annual fees ranging from $35,000 to $4.9 million depending on company size to get rights to the startup's portfolio.
More than one out of every three of the cases filed in 2009 involved telecommunications companies, according to RPX. Ten of the startups members are in telecom.
Only one in every 10 of the cases last year was against semiconductor companies, but that number is expected to grow to rival telecommunications cases by 2015, according to RPX. Some industry observers dispute that forecast.
"Many NPE's prefer to assert as high up the value chain as possible--asserting semiconductor patents against systems vendors or even end users," said Mike McLean, vice president of professional services at UBM TechInsights, a patent services company owned by the publisher of EE Times.
"Licensing the semiconductor companies potentially exhausts many upstream licenses and limits the overall financial return," said McLean. "Of course, many semiconductor companies will get pulled into these disputes due to indemnity agreements with their customers," he added.
RPX was founded by a former senior executive of Intellectual Ventures which itself was initially formed by executives from Intel, Microsoft and others as a way to handle the rise of patent suits. Published reports said the increasing cost of membership in the service run by Intellectual Ventures opened a door to competitors such as RPX.
"The RPX model is an effective approach for companies looking to reduce the costs of patent royalties or damages that may burden their business in the future," said McLean. "An increasing number of companies are developing sophisticated defense strategies and patent aggregation can be a key program in support of such a strategy," he added.