The business model of this defensive IP aggregator is not only unique, but it is inspiring for those of us that spend most of our professional time working with and protecting the IP of operating companies. Commencing business just one year ago last month, RPX celebrated its birthday with the recent announcement that HTC Corp., a Taiwanese mobile phone company, has become the 20th company to subscribed to RPX’s membership.
How it works: RPX offers operating companies a unique opportunity to defend against offensive patent aggregators and NPE’s by signing up as an RPX member. An annual fee gives each member a license to all of the patent rights that RPX uses its capital to buy in the open market. RPX analyzes its member’s fields of technology and anticipates where those technologies, and therefore patents, are most likely heading. RPX goes out into the open market and tries to purchase such patents before other aggregators can. The members then own a license to these patents, limiting their exposure to patent infringement suits filed by such NPE’s. Genius!
Per RPX’s website, the company touts its services as follows:
The RPX Defensive Patent Aggregation service is the first of its kind. Previously, defending against non-practicing entities has been largely a unilateral effort for asserted companies - paying a licensing fee or settlement, mounting a legal defense, and some purchasing of contested patents - with significant risks and high (and highly unpredictable) costs.
RPX changes the defensive landscape for operating companies by decreasing the supply of assertable patents available to NPEs. In addition to your own company’s patent purchasing, negotiation and counter assertion efforts, RPX provides a service that identifies and purchases patents that could be used offensively against you. We purchase these key patents into our Defensive Patent Aggregation, which is then licensed in its entirety to our members for an annual subscription fee. Our fees are significantly lower than the patent acquisition or assertion defense costs a member would otherwise face. It is a powerful new patent defense service, built on a total alignment of interests between RPX and its members.
I have had the opportunity to meet John Amster, Co-CEO of RPX, and to hear him speak at the Ocean Tomo Auction and Conference. To say the least, John understands RPX’s position in the IP market and what it will take to effectively wage this war against NPE’s. Prior to starting RPX, John has had senior positions with Intellectual Ventures and Ocean Tomo, so it is safe to say that the leadership at RPX knows the business and the IP market well.