This is an classic example of what edig may be in a time sooner than most of us would have thought.

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Monday night's blockbuster $900 million sale of some 4,000 former Nortel patents by one consortium of tech giants, including Apple and Microsoft, to another alliance of heavyweights, is a dramatic example of a litigation-free alternative for handling intellectual property disputes that is central to the business model of RPX Corp., the San Francisco-based patent aggregator at the center of the deal.

"This is the largest syndicate of its kind, and it proves once again that our clearinghouse approach can transform the patent licensing process from one dominated by prolonged litigation to one that is transparent, scalable, and provides a rational outcome for licensors and licensees alike," said John Amster, co-founder and CEO of RPX (NASDAQ: RPXC).

RPX formed a subsidiary called RPX Clearinghouse to do the transaction.

The deal, the largest RPX has ever done, caps settlements of lawsuits filed late last year against tech companies including Cisco and Google by Rockstar Consortium, the Canadian entity formed in 2011 by Apple, Blackberry, Ericsson, Microsoft and Sony. The litigation against Google centered on its Android mobile operating system, and involved numerous Android phone manufacturers like Samsung.

Rockstar spent $4.5 billion after a bidding war with Google to purchase about 6,000 patent assets covering wireless, wireless 4G, data networking, optical, voice, Internet and semiconductor technologies from the estate of Nortel Networks, which went out of business in 2009.

Rockstar's members already divvied up about 2,000 of the patents they wanted for their businesses, for example, related to smartphones, which is vitally important to Apple.

RPX Clearinghouse, which contributed $35 million toward the purchase price, will receive license payments on the 4,000 patents from a syndicate of more than 30 companies, including Cisco and Google. Syndicate participants in turn get non-exclusive licenses, as will any other companies that want to buy licenses.

The RPX Clearinghouse syndicate includes a broad range of companies, including software and media providers, semi-conductor and other equipment manufacturers, wireless carriers and wireline network operators.

The key to making the system work is that neither RPX nor any of its customers can use the patents offensively to pursue claims of patent infringement.

"With RPX acting as a clearinghouse and deal manager, a global consortium of unprecedented scale came together willingly and reached a fair value for licensing patent rights in a negotiated business transaction instead of a courtroom," said Mark Chandler, Cisco's general counsel.

"This is an approach and transaction that is constructive for the entire industry," Chandler said.

Erich Andersen, vice president and deputy general counsel of Microsoft, issued a similar statement, calling the deal "good news for our industry as it demonstrates our patent system working to promote innovation."

Amster, also an attorney, co-founded RPX in 2008 on the premise that an increase of patent litigation pursued by non-practicing entities (the more polite name for patent trolls) revealed a market inefficiency. There had to be a way for technology companies to cut risk proactively, and for patent holders to more easily get paid. RPX went public in 2011 with a business model of collecting annual fees from clients to buy potentially dangerous patents, with or without client involvement, with the guarantee that RPX will never assert patents or patent rights.For the quarter ending Sept. 30, RPX's revenue was $65.4 million with a profit of $10.8 million. The 150-person company had invested over $890 million to acquire more than 4,900 U.S. and international patent assets and rights on behalf of the 195 members of its network in seven key sectors: consumer electronics and personal computers, e-commerce and software, financial services, media content and distribution, mobile communications and devices, networking, and semiconductors