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Summary:

Two major tech industry players say their cross-licensing deal is an example of how to extract value from a patent portfolio without resorting to controversial trolling techniques.

Patent  Defined

Google and Cisco on Tuesday announced a long-term agreement in which they will license each other’s patents as part of a larger effort to curtail nuisance patent lawsuits. The companies did not specify how many patents are involved, but described the deal as a “cross-­licensing agreement covering a broad range of products and technologies.”

Google and Cisco claim the deal will reduce the risk of future litigation and “privateering” — a practice in which firms, including Microsoft and Apple, arm shell companies with old patents. The spread of privateering and so-called patent trolls has led in recent years to a growing number of expensive lawsuits, engulfing everyone from the cable industry to small app developers.

In a phone interview, lawyers for Cisco and Google said that the deal is intended to show how companies can obtain value from their patent portfolios without resorting to trolling. They added that the agreement is structured in such a way that it encumbers the patents themselves — meaning they can’t be used against Google or Cisco in the future, even if one company sells them.

For Google, the deal comes on the heels of a 10-year cross-licensing deal with Samsung, and is part of a larger effort to broker patent peace after years of costly litigation. According to Allen Lo, the company’s general counsel for patents, Google is open to entering cross-licensing arrangements with any company.

For Cisco, the push to promote cross-licensing comes after a number of high-profile fights against shell companies that abuse the patent system. In 2011, for instance, Cisco filed federal racketeering charges against a troll controlled by lawyers that demanded money from 8,000 hotels and coffee shops for offering Wi-Fi service.

Google’s recent call for patent cross-licensing also comes at a time when all three branches of government are pushing to reform the U.S. patent system: President Obama, for instance, called on Congress during the State of the Union address to finish a proposed bill, while the Supreme Court is hearing a series of cases that seek to limit the spread of low-quality patents.

This story was updated at 8:08am to correct the first name of Google’s counsel.

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  1. basic common sense, good idea

    1. Not a good idea for companies that sell something Google has decided to copy and give away for “free.”

      1. not really, it’s the crowd affect, if your product can be enhanced and has a wide user base, it’s an opportunity

  2. Google has decided to “copy” Cisco’s desktop IP phones. They will run Android and be designed by the nest team.

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