In an effort to avoid costly patent litigation, Microsoft has become the first company to sign up to a crowdsourcing service that seeks to find prior art and eliminate patents that should not have been awarded.
The new Litigation Avoidance Program comes from Article One Partners, a startup that pays cash rewards to discoverers of prior art. Article One pays out rewards of between $5,000 and $50,000 to members of its claimed million-strong community of patent researchers, and says it has paid out more than $1.3 million so far.
So far, Article One has operated a scheme enabling those on the receiving end of patent litigation to crowdsource the search for relevant prior art; with that prior art the defendents can then seek to have the patents being wielded against them invalidated. The Litigation Avoidance Program goes a step further, proactively seeking out patents purchased by non-practising entities, and then hunting down prior art relevant to those patents. Non-practicing entities—better known as patent trolls—are those companies who perform no research and make no products, but instead buy patents and then use them in lawsuits.
The Litigation Avoidance Program should enable companies to more easily identify poor-quality patents that ought not have been issued, and use the prior art to overturn those patents and avoid costly damages awards.
Microsoft is no stranger to patent trolls; most famously, the company was ordered to pay $521 million to Eolas after Eolas sued Microsoft claiming that Internet Explorer's use of plugins infringed on an Eolas patent. Microsoft appealed and eventually entered into a settlement agreement with the patent troll, the terms of which are not public. Bart Eppenauer, Chief Patent Counsel at Microsoft, warned that "NPEs continue to actively target large technology companies and often with portfolios of questionable quality", and that the Litgation Avoidance Program would "reduce risk and potential litigation cost."
Of course, the Litigation Avoidance Program wouldn't have helped in the Eolas case—that patent withstood prior art challenges.