“The concept of defense alliance fund is that groups of companies in complementary businesses pool their resources to buy a portfolio of patents. They can then either borrow patents from this pool needed to counter assertions made against them, or target the pool to create revenue that can then be used to offset royalties paid to the patent powerhouses.” Admittedly cryptic as quoted, this arrangement is described by Ron Epstein, CEO of IPotential, in a March 11, 2004 Web conference organized by Foley & Lardner.
From what I can glean, this appears to be a management initiative that makes more productive use of the company’s patents as well as related patents, and helps control patent defense costs (See my post of Oct. 14, 2005 on collective activities by law departments.).