According to this Reuters summary of a Wall Street Journal article,
Verizon Communications Inc, Google Inc, Cisco Systems Inc, Hewlett-Packard Co and Ericsson, are believed to have a joined a group calling itself the Allied Security Trust.
The companies will pay roughly $250,000 to join the group and will each put about $5 million into escrow with the organization to go toward future patent purchases, the paper said.
So their plan seems to be for the Alliance to buy patents, license them back to individual member companies, and then sell the patents again. It’s a form of collective self-defense, but I’m not convinced it’s the wisest possible move, or one that will be free of public (government) scrutiny.
Think about this. A patent that had been neutered for use against cash-rich companies should be worth less after the deal is done. After all, some potential buyers of those patents would want them specifically to extract payment from those same companies, and those doors would now be closed. So the Alliance might seem to lose money over time, eating up those $5M escrow accounts fairly quickly.
On the other hand, if the patent is worth more after the deal, as I suspect is the intent, esp. for the Alliance to be self-sustaining, then that’s a reasonable indicator that the patent was probably weak in the first place. The very act of licensing gives it validity and added value.
In other words, for the Alliance to be successful in its current form, it needs to perform part of the public disservice of patent trolls. It’s an escalation in the patent war, not a deterrent or détente. And that in and of itself could drive the prices up, not down, for patents it seeks to acquire. And a speculative market for patents is born.
It seems to me that in the "circling the wagons" metaphor, the settlers are stuck playing defense, and their defense, for the most part, does no one any good. Wouldn’t it better for everyone if they could actually kill the marauding patent trolls outright?
Whether this consortium, which includes Google, is ultimately seen as "good" or "evil" largely depends on that question, and how others feel about being let in or kept out of the Alliance, which is priced a bit beyond what any small company could afford.