There is clearly a strategic advantage to being first in your industry to join LOT, and the worst position is to be last in your industry to join LOT. We understand that some legal departments are very conservative and would prefer to wait to be a follower rather than a leader in their industry when it comes to industry initiatives. With LOT, however, companies who choose to wait to join are at a competitive disadvantage.
Being first in an industry to join has no downside and offers a distinct competitive advantage. That is why you see industry leaders like Google, Red Hat, Canon, JP Morgan Chase, Ford, and Alibaba in LOT (all leaders in their respective industry).
By being first in an industry to join, you are able to maximize the number of assets that you are immunized against. Over 42,000 assets have already left the network, so by waiting to join even now prospective members have incurred a lost opportunity cost by not being in the network. But by joining now, a company can still be immunized to over 788,000 assets should they fall into the hands of a PAE. Several members are actively selling or divesting patents (e.g. Google, Lenovo, Daimler/Mercedes, SAP, etc.). By delaying when a company joins, they take on the risk of missing out on being immunized against the assets that are sold before a company joins.
At the same time, a company that is the first in their industry to join has not affected their IP Strategy vis a vis the other members of its industry. That company is still able to sell to a PAE who intends to assert those assets against the others in their industry. Since the others in the industry have not joined LOT, they would not be immunized against them.
As those other members did join LOT, the early adopter would continue to get upside value as now the early adopter is protected should any of those late comers try to privateer (i.e. assert their patents through PAEs). As they join LOT, the early adopter is protected.
On the flip side, the last in the industry is the worse position to be for two reasons. First, they will be immunized against fewer assets than the others in their industry that joined before them. By being immunized to fewer patents, they have greater risk/cost that they will still have to defend themselves against more assets and be at a competitive disadvantage compared to its peers.
Second, the others in the industry (along with the rest of LOT), may sell their assets which then fall into the hands of a PAE. But being last to join means the late comer may have to defend itself from those assets alone and without assistance from their peers who are in LOT. The others in the industry will already be licensed for free and not be named as co-defendants in those future PAE lawsuits. There will be no joint defense groups or need for information and cost sharing. The late comer will have to bear the full cost/risk of the assertion.
Those that are nervous about joining should also consider this. Most of the PAE suits companies are hit with are NOT based on patents that came from that company’s industry peers. PAEs prefer to assert patents that have broad applicability across several industries (e.g. patents on wifi, websites, mobile apps, cloud computing, networking, security, etc.). The patents on these technologies typically do not come from your peers in the industry.
There is NOTHING to be gained by waiting for the others in your industry to join first. As in life, the early bird gets the worm.