Last Updated Nov 24, 2008 12:13 PM EST
The startupâ€"RPX Corp.â€"is a so-called defensive patent aggregator. RPXâ€"short for Rational Patentâ€"aims to reduce the costs associated with non-practicing entities (NPEs). These NPEsâ€"known as patent trolls to you and meâ€"acquire the rights to patents and then launch lawsuits.
RPX is more diplomatic in its press release, but that's the general idea. IBM and Cisco are signed up with RPX, which has funding from Kleiner Perkins Caufield & Byers and Charles River Ventures. I had a briefing scheduled for today, but it appears the Wall Street Journal has spilled the beans. Here's how the model works:
- Companies pay annual fees between $35,000 and $4.9 million.
- RPX buys patent portfolios to play keep away from patent trolls.
- Member companies benefit because the fees are less than what a court defense would costs.
Thus far, RPX has acquired more than $40 million in patent rights and will hit $100 million in its first year. The company, founded in March, counts John Amster, a former Intellectual Venures and Ocean Tomo executive, and Geoffrey Barker, founder of Cobalt, as co-CEOs.