In 2014, a group of America's top technology companies created a unique way to combat the problem of patent assertion entities:  the License On Transfer (LOT) Network. Founding members of the LOT Network included Canon, Dropbox, Google, SAP and Ford Motor Company. In September 2015, Enplug Inc., Inductive Automation LLC, and SilverEdge Inc. joined the network.

Members of the LOT Network must sign an agreement to grant the other members a perpetual, royalty-free license to the member's patents upon the occurrence of a "Triggering Event." Triggering Events include a transfer of a patent (other than a defined "Non-Assertion Transfer"), or a change of control in which the surviving entity is a non-assertion entity.

As of the time of this post (September 2015), the LOT Network included over 50,000 granted patents and nearly 300,000 patent assets (including patents and pending applications). It serves as a unique, market-based solution that allows members to put their patents on the line when facing the challenge of patent assertion entities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.