General Motors Company (NYSE:GM) and Honda Motor Co Ltd (ADR) (NYSE:HMC) are the latest vehicle manufacturers to become part of a team of tech firms that use licenses to keep off patent assertion entities.
The alliance of tech companies is led by Alphabet Inc (NASDAQ:GOOGL) and its main agenda is to make sure that they do not crash with the patent assertion entities which also known as patent trolls. These are companies that hold various patents but do not produce any products. These firms have been a threat to the tech industry because they often pop up with lawsuits when new products or services are introduced into the market.
Honda joined the alliance which is called the License on Transfer (LOT) Network earlier this month while GM jumped on board in July. The two firms are the latest automobile manufacturers to join the LOT. A few other vehicle manufacturers including Ford Motor Company (NYSE:F) and Hyundai Motor Co. Uber is also a member of the alliance. LOT was launched in 2014 as a non-profit network. It was an initiative that was launched by Google and its members have pledged that none of their patents will be used by patent trolls to file a lawsuit against a member company.
The pledge does not prevent the member companies from suing each other or prevent them from selling their patents. LOT has more than 70 members and it is not limited to the tech industry. There are member companies from different sectors such as JPMorgan Chase & Co. (NYSE:JPM) which is one of the most notable players in the financial sector.
Ken Seddon, the CEO of the LOT network stated that the participation of companies from different sectors is an indicator that most of the major firms are involving themselves in tech. it also means they have become increasingly susceptible to threats from patent trolls especially those related to internet services. GM’s chief intellectual property counsel stated that the automaker joined because the troll problem has become a bigger threat.