By Dow Jones Business News, February 21, 2013, 08:41:00 PM EDT
By Steven D. Jones
Microsoft Corp. ( MSFT ) will soon publish on the Web details of the patents it owns in an effort to foster more
transparency among patent holders and reduce litigation.
Microsoft representatives made the announcement during a Capitol Hill event Thursday sponsored by The Software
Alliance and the National Association of Manufacturers. Later in the day, Executive Vice President and General Counsel
Brad Smith pledged in a blog post that by April 1Microsoft will publish on the Web "information that enables anyone to
determine which patents we own."
On the posting, Mr. Smith said the Redmond, Wash., software giant will open its patent catalogue with the "hope that
other industry leaders will follow suit. With transparency we can help bring additional sunlight to the patent system."
The move comes as the U.S. Patent and Trademark Office has considered drafting so-called "real party of interest"
rules. The rules could make it more difficult for patent holders to conceal ownership and shuttle intellectual property
between shell companies. The ploy is often used by companies that buy patents with the intent of using them to sue
manufacturers in the future.
Clouding ownership of a patent makes it difficult for technology companies to identify competing technology and seek a
license. Obscuring ownership also makes it easier for companies to spring a patent suit on an unsuspecting manufacturer,
a practice that has earned the name "patent trolls" for companies that use the tactic.
Microsoft and other large technology companies have complained that such frivolous patent suits stymie innovation and
cost millions in legal fees and settlement costs. But regulations the Patent and Trademark Office is considering could
also force large companies to disclose patents they have acquired, are held by subsidiaries or otherwise unknown to
Microsoft's announcement to publish its patent catalogue is an attempt to lead its technology peers toward greater
transparency, said an attorney familiar with the company's intent. Disclosure of all patents removes the option to use
secrecy as a path to litigation.
Microsoft is no stranger to patent litigation and has filed patent action against competitors in courts in the U.S.
and abroad. It's involved in a high-profile suit against Motorola Mobility in U.S. District Court in Seattle over how
much a patent holder can charge for technology considered part of an industry standard. Motorola Mobility is a unit of
Google Inc. ( GOOG ).
In addition to publishing its patent library, Mr. Smith's blog post said the industry should halt lawsuits over
standard essential patents. He also said Microsoft endorses a loser-pays approach to patent suits aimed at deterring
frivolous patent litigation and improving patent quality with language that "reflects what has actually been invented."
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