Google, HP and others form League of Extraordinary Patent Holders

Tired of fielding lawsuits from patent trolls and scared of court injunctions like that faced by RIM which nearly shut down the company's BlackBerry service, Google, Hewlett-Packard, Cisco, Verizon and Ericsson are among the companies rumored to be behind the formation of the Allied Security Trust. Ponying up $250,000 down payments and $5 million in escrow to make purchases, the trust seeks to buy patents before they fall into the hands of patent trolls. (That's the polite name the group's founders use for companies which seek to make money litigating infringers rather than by create products.) But the real bogeyman here is the rise of a possible patent troll to rule all patent trolls, Intellectual Ventures, which has close ties to Microsoft.

The plan is for companies that buy into Allied Security to buy up unused patents, issue themselves nonexclusive licenses for a song and then sell the patents. While it's not clear if Allied Security is a nonprofit, former IBM veep Brian Hinman who heads up the organization asserts it's not a profit-making venture. IBM, of course, has done much to refashion itself as a promoter and producer of open-source software — something anathema to Microsoft's culture.

The same can't be said of Intellectual Ventures, which was founded by former Microsofties Nathan Myhrvold and Edward Jung, Intel's Peter Detkin, and Gregory Gorder of Seattle law firm Perkins Coie, which counts Microsoft as a top client. Myhrvold has been buying up patents left and right, and while his company has yet to sue anyone, he hasn't ruled it out. Microsoft executives have traditionally aped Bill Gates hard-line rhetoric when it comes to intellectual property, and there's little reason to believe Myhrvold and company are any different. While Google is also an investor in the fund (along with Apple and eBay), the Mountain View company must be worried enough about the fund's plans and ties to have helped create a potential competitor.

In other words, if Intellectual Ventures continued to aggregate patents in a competitive vacuum, it could become just as if not more dangerous a monopoly than Microsoft in the company's heyday by commanding premium royalties or denying access to patents entirely in order to hobble products and competitors. It's yet to be seen if Intellectual Ventures will carry water for the Redmond software giant in court, and for now, Allied Security is collection of legal documents and yet an actual owner of patents, but this could shape up to be one of the most boringly important battles in the coming years.