How Scalable Private-Ordering Solutions Improve IP Law: Lessons Learned From My Founding of the License on Transfer (LOT) Network

Abstract

Scalable private-ordering solutions can dramatically improve an area of law, e.g., patent law, for a subset of the impacted community. A private ordering solution (a POS) modifies the legal framework for a common interest group via a standard contract. Open Source is one example of a POS in the copyright context. This paper uses the License On Transfer (LOT) Network (the largest networked patent cross license by number of patents) as a case study of a POS. The paper starts by describing the LOT agreement and the current status of the LOT Network, the independent organization that administers the LOT agreement. The paper then provides a chronological case study of the founding of the LOT Network up to the point of achieving critical mass. Lessons learned from the author’s experiences founding the LOT Network are called out throughout the case study. Such information should be of use to those interested in using a POS to improve other areas of law for a common interest group or when it is difficult to make needed changes via legislation or case law.