Protection - At a Price

Submitted by patentadmin on Thu, 03/25/2010 - 17:02

With all of the criticism being levied against so-called “patent trolls,” we were very interested in a lawsuit recently filed against a self-proclaimed and self-righteous “anti-troll” organization. (Limelight Networks, Inc. v. Allied Security Trust et al.)

Allied Security (AST) purports to be in the business of protecting its 16 members from attack by those pesky N.P.E.s. When AST identifies a patent which, if it were to fall into the wrong hands, might be asserted against one or more members, it acquires said patent and grants licenses to the interested members. To this point, all well and good.

However, what does AST do with such patents after granting licenses to its members? It says that the patents “go into the market and any money raised is returned to the members involved in the original purchase.” The subject lawsuit gives us a glimpse of how that is actually done.

In its lawsuit, Limelight alleges that it was contacted by a broker representing AST et al. The broker suggested that Limelight consider purchasing or licensing four patents owned by AST. In order to aid Limelight in its consideration, the broker posted a presentation on its website, available to the public, which made various claims as to the scope of the subject patents and “the value of the businesses whose products or services are alleged to be covered by the claims [of the patents].” The presentation identified various companies which had been sued for allegedly infringing the patents and had subsequently entered into “significant” settlements with AST et al., contended that Limelight infringed the patents, and “demanded an amount for license or purchase of the [subject patents].”

Limelight rejected the demands made upon it and sued for a declaratory judgment of noninfringement.

So AST claims not to be a troll, although its broker seems to be a troll of the worst sort. Indeed, their business model differs from that of conventional trolls – it seems more like that of the mafia.

In case the reader is interested, membership in AST costs $200K per year plus a one-time sign-up fee of $150K.

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