Startups often face numerous challenges on their journey to success. Among these challenges, patent assertion entities (PAEs), commonly known as “patent trolls,” can pose a significant threat. PAEs target businesses by asserting patents—often of questionable validity—and demanding licensing fees or filing lawsuits. Alarmingly, over half of the companies sued by PAEs generate less than $10 million in revenue annually, making startups especially vulnerable. Recognizing this threat, we are proud to announce that we have joined LOT Network.
What is LOT Network? LOT Network ("LOT" stands for "License on Transfer") is a nonprofit organization designed to protect its members from PAE lawsuits. With over 4,200 members, including major players like Tesla, Cisco, Lyft, and Airbnb, as well as hundreds of startups, LOT Network represents a collective shield against the patent litigation tactics used by PAEs. Together, its members safeguard each other from the misuse of patents, covering a portfolio of more than 3.6 million patents globally.
How Does LOT Network Work? LOT Network members agree that if any of their patents are ever transferred to a PAE, the other members automatically receive a license to those patents. This means that even if a PAE acquires a patent, it cannot be used to sue LOT Network members. Importantly, members retain full control and ownership of their patents, enabling them to use, sell, or license them as they see fit, without compromising their protection.
Why Startups Should Care Startups often operate with limited resources and cannot afford lengthy or costly legal battles. A single PAE lawsuit can derail operations, drain financial resources, and distract leadership from their core mission. By joining LOT Network, startups gain:
Legal Protection: LOT Network reduces the risk of being targeted by a PAE lawsuit, ensuring that patents within the network cannot be weaponized against members.
Industry Collaboration: Membership in LOT Network fosters collaboration and solidarity with thousands of other companies, from innovative startups to established industry leaders.
Cost Savings: Avoiding litigation can save startups millions of dollars in legal fees, allowing them to focus on growth and innovation.
Commitment to Innovation and Collaboration By joining LOT Network, we’re not only safeguarding our business but also contributing to a broader movement that supports fair innovation. The collective strength of LOT Network sends a clear message: the business community is united against the predatory practices of patent trolls. We’re proud to stand alongside other forward-thinking companies in this effort.
Conclusion PAEs thrive on exploiting vulnerabilities in the patent system, often targeting startups that lack the resources to defend themselves. LOT Network provides a practical solution to this pervasive issue, offering peace of mind and the freedom to innovate without fear of unwarranted litigation. Joining LOT Network aligns with our commitment to protecting our company’s future while supporting a healthier innovation ecosystem. Together, we can outsmart patent trolls and focus on what truly matters: building a better future.
