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The LOT ( License on Transfer) Network is a nonprofit organization that was formed to combat patent assertion entities (PAEs), also known as , by cross-licensing that fall into the hands of PAEs.Carolyn Said (January 29, 2016). "Firms team up to battle suits by patent trolls". San Francisco Chronicle.
The number of patent disputes in the U.S. peaked in 2015, reaching 7,500 cases. According to Unified Patents, two-thirds of these cases were filed by patent trolls. A study out of Boston University found that patent litigation results in direct losses of about $60 billion every year in the U.S.
As of October 2024, LOT had within its membership:
LOT members pay an annual fee for network membership. The annual fee depends on company revenues, but ranges from $1,500 to $20,000 per year (about the price of a single patent application). On September 1, 2016 LOT announced that it would waive annual membership fees until March 1, 2017 for companies with less than $5 million in annual revenues. This fee structure facilitates membership for startups and smaller companies, which are also targeted by PAEs. Over half of companies sued by PAEs make less than $10 million in revenue. In the event that a larger LOT member acquires a smaller member, the acquired company can pass on its patent license rights to its acquirer.
The organization hosts an annual member meeting, LOT Network BRIDGE, which has featured speakers such as current and past U.S. PTO Directors and the head of the Unified Patent Court. The 2026 event will feature John Squires, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO), and David Kappos , who has previously held that title, will headline a Director-to-Director fireside chat.
In 2023, TechCrunch featured a two-part series on the anatomy of patent litigation, highlighting the aftermath of OpenText $6 billion acquisition of Micro Focus, wherein OpenText picked up thousands of granted and pending patents through the acquisition and Micro Focus is now giving up its membership in LOT Network. Reporter Paul Sawers wrote: "OpenText is no stranger to patent assertion, and it has already been accused of behaving like a patent troll in the wake of its 2019 acquisition of data security firm Carbonite — a deal that has led to ongoing patent litigation proceedings against CrowdStrike, Kaspersky, Sophos and Trend Micro."
Semiconductor giant GlobalFoundries encouraged others within the industry to join LOT in order to safeguard their sector. Their Chief IP Counsel Adam Noah said: "Semiconductors are the key building blocks for so many products that the world relies on to live, work and connect. We are committed to protecting our technology and securely manufacturing the essential chips our customers, partners and industry rely on. By joining the LOT Network, we are further safeguarding our business and our customers against PAE litigation, allowing us to focus on the important work of delivering world-class technology solutions. We encourage others within the semiconductor manufacturing and design ecosystem to address the PAE drain on resources by joining LOT’s protective community, which provides strength in numbers.”[1]
Shopify's General Counsel published a piece encouraging young companies to take an active part in preventing and fighting PAE litigation: "Since we started fighting back, fewer entities sue us...We'll continue supporting organizations like...LOT Network that fight this battle daily...To the entrepreneurs reading this: we see you. We know a single meritless lawsuit can kill a young company. That's why we fight, not just for Shopify, but for the entire ecosystem of builders who deserve to create without fear."
While LOT helps prevent , it does not address low patent quality or hinder companies that attack competitors to stall progress and gain a competitive advantage. Daniel Nazer, a staff attorney at the Electronic Frontier Foundation praised LOT but added a note of caution: “It’s a targeted program that’s good for limiting the supply of patents to the very worst actors who use litigation to shake down people for settlements, but it doesn’t stop problems with patent quality and with operating companies attacking each other.” The Electronic Frontier Foundation alleges that, ultimately, the patent system must be reformed to ensure that the U.S. Patent Office only grants patents for genuine inventions.
Intellectual Ventures, a well known PAE, alleges that by buying patents they create a market for invention, thereby helping to revitalize inefficient companies and make innovation profitable. Others, including Ira Blumberg – a former Rambus (a well-known PAE) employee – have countered that any value created by patent trolls is outweighed by settlement costs. Deputy Editor Angela Morris of IP-focused publication IAM wrote that in late December 2025, NPEs featured prominently among buyers of US patents.
In 2017, IAM published an analysis of the financial return on joining LOT Network. The article concluded that LOT Network membership offers significant ROI, particularly for companies facing PAE threats, with benefits increasing over time. A financial model for assessing ROI is available for download.
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