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Microsoft joins LOT Network, helping protect developers against patent assertions

Posted on October 4, 2018

Corporate Vice President, Deputy General Counsel

We are pleased to announce that Microsoft is joining the LOT Network, a growing, non-profit community of companies that is helping to lead the way toward addressing the patent troll problem, an issue that impacts businesses of all sizes.

Microsoft has seen this problem firsthand. We’ve faced hundreds of meritless patent assertions and lawsuits over the years, and we want to do more to help others dealing with this issue. In most cases, the opportunists behind these assertions were not involved in the research and development of the ideas that came to be embodied in patents. Many do not even understand the technical concepts described in them. In the most extreme cases, we’ve seen mass mailings and campaigns to extract value from small businesses who are not equipped to understand patents. Although these problems are less acute in the US today than in the past, in part because of changes in the law, the challenge persists for many businesses. Entrepreneur magazine cited a recent study showing that 40 percent of small companies involved in patent litigation reported “significant operational impact” from those suits, which some described as a “death knell.”

What does all of this mean for you if you’re a software developer or in the technology business? It means that Microsoft is taking another step to help stop patents from being asserted against you by companies running aggressive monetization campaigns. It also means that Microsoft is aligning with other industry leaders on this topic and committing to do more in the future to address IP risk. By joining the LOT network, we are committing to license our patents for free to other members if we ever transfer them to companies in the business of asserting patents. This pledge has immediate value to the nearly 300 members of the LOT community today, which covers approximately 1.35 million patents.  

This also means we are continuing on the path we started with the introduction of the Azure IP Advantage program in 2017. As part of that program, Microsoft said that it would defend and indemnify developers against claims of intellectual property infringement even if the service powering Azure was built on open source. We also said that if we transferred a patent to a company in the business of asserting patents, then Azure customers would get a license for free. Our LOT membership expands this pledge to other companies in the LOT network. 

Patents and intellectual property still play an important role in our industry because they protect breakthrough innovations and allow companies large and small to recoup research and development investments in areas like artificial intelligence, mixed reality, network security, and database management. However, these benefits are undermined when the system is abused by opportunists pursuing needless litigation. We all need to work together to prevent patent litigation abuse. We invite other companies to join the LOT network! We look forward to working with LOT in the future on other ideas that benefit developers and customers facing IP risks.