What Can Small Tech Companies Do About Patent Trolls?

[fncypants]

I am a patent lawyer, and the sentiment from the article is on point. Recent case decisions have flipped the script for small companies targeted by patent trolls. The term “Troll” captures many different kinds of patent lawsuits, but most often now the only trolls willing to sue small companies are looking for a quick small payday and will not tolerate any suggestion that they have to put up a real defense of their case on the merits. It can vary, but I have convinced several trolls to drop their case for small clients for just an hour’s worth of work. They know when I make an appearance for a client that they have to put up a fight and will walk away, and if they don’t I have been successful in several cases getting them to pay the lawyer fees incurred by my clients. Happy to answer any questions about the range of responses that may be necessary to defend against this scourge. But I’m happy to report that the trend is favoring the defendant in these scenarios.

[cinericius]

>Recent case decisions have flipped the script for small companies targeted by patent trolls.

It would be interesting to see examples of this. What were the outcomes of these cases and how did judges reach those decisions? Many thanks for your time.

[walrus01]

Is it still a thing for patent trolls to have a 80 sq ft "business office" with no staff somewhere in east texas, and to file suits there?

https://www.google.com/search?client=ubuntu&channel=fs&q=eas...

[lazysheepherd]

Can patent trolling be decreed as an offense, or it is too much gray area to define and detect it reliably? Is the action punishable under another offense category, e.g. fraud?

If not, what are your thoughts on what can be done to dissuade bad actors from engaging patent trolling, and seek the end of the "scourge"?

[dshuang]

Would you mind providing a way to contact you in your profile? I'm not sure my questions regarding average cost per case, duration, etc. are appropriate for this thread. Thanks.

[cbcoutinho]

Is this a problem primarily in certain parts of the world or is it wide-spread?

[dccoolgai]

New idea for a service: I patent troll your startup with an obvious bad patent. You pay me a very small fee and I lose the case on purpose. On paper you look like you fight back hard, so no other trolls bother you. Company name: troll armor.

[icebraining]

Cool idea; a kind of Batesian mimicry[1] to avoid legal predators.

[1] https://en.wikipedia.org/wiki/Batesian_mimicry

[JackRW]

funny. Sadly, probably won't work because courts require an actual case or controversy.

[progfix]

Is losing a case on purpose illegal?

[gt_]

Go right ahead, give it a try. I patented this in ‘98.

[zackbloom]

A fun read about what Cloudflare did to a patent troll: https://www.google.com/amp/amp.timeinc.net/fortune/2017/09/2...

[prewett]

The above article describes the case, but not the resolution, which was that the judge invalidated the patent [1]. Blackbird said it would appeal, but Google doesn't bring up anything after the initial decision.

Personally I thought the best was Newegg sueing the patent troll that dropped their case. "They started the litigation, it would be irresponsible not to finish it." Unfortunately, the case seems to have been terminated several months later, so I'm guessing it didn't work. [2]

[1] https://blog.cloudflare.com/bye-bye-blackbird/

[2] https://www.pacermonitor.com/public/case/10583332/Rosewill_I... (see upper right)

[quizotic]

Is there any protection to be had by a corporate shell game? Suppose I put my technology assets in one corporation, my revenue and monetary assets in a 2nd corporation, and my customer facing presence in a 3rd corporation. The patent trolls descend on the customer facing presence, which has no substantial technology or monetary assets. If it goes into bankruptcy, I lose brand, but can restart elsewhere and preserve my tech and monetary assets ?

[YPCrumble]

That is genius and exactly what real estate developers do in Philadelphia. They have one shell company for their brand and a separate shell company for each development. If they have 100 separate houses to develop, they may have 100 separate shell companies. This way they close the shell company as soon as they finish a project so that any lingering issues in the community have no recourse.

Say they build a house next to yours and tear up your roof in the process causing it to leak. You need to sue them ASAP or their company will no longer exist in a month or two so you have nothing to sue.

I’d love to hear why LLC’s are a good idea; for the most part they seem like a scheme to avoid responsibility and evade taxes for rich people.

[fncypants]

The patent laws contemplate indirect or joint infringement, that could hold multiple entities liable if there is sufficient coordination. What you propose is an interesting investigation, but would quickly run into these issues of multi-party infringement.

[Spooky23]

Answer is that it depends. Investors will want protections that would render some of that separation moot.

Often those separations are more productive for tax purposes. For example, you can avoid up to 90% of many taxes with a presence in the US Virgin Islands.

[gt_]

Interesting. So you would have one person with 3 business entities; one for the “mode of production” (technology assets), one for the “means of production” (revenue and monetary assets), and one for the “relations of production” (customer facing presence). Having studied a little bit of Karl Marx in school, I just can’t help but recognize the congruencies between your solution and his theory of Modes, Means, and Relations of Production. It’s quite profound in the context of high-tech modes and patents as an override for securing them. The “modes” are one of the hardest to grasp. He asserted they are the exterior elements like lifestyles, infrastructure, and processes that capitalism would depend on but not account for, and conveniently replace at will, at an accelerating rate. Orthogonality certainly sounds like the way to go if you can manage it.

Anyhow, sorry I don’t have the legal info you’re after. I wishe you luck.

[clearwater82]

For the love of God someone sell patent troll insurance yo startups - trust me there is a lot of money to be made here by diversifying the risk.

[bostondenver]

I read that these insurance companies are sometimes patent trolls themselves, basically collecting ‘protection’ money

[raverbashing]

No. Insurance can't solve extortion.

It would be the wrong message to send (unless you like being bullied)

[cowpig]

That sounds like a business idea that, if successful, quickly renders itself irrelevant unfortunately

[andy_518]

It can also be the other way around: Startup files a patent to potentially take down competing companies (big or small) or open-source projects:

Ref: https://news.ycombinator.com/item?id=15090927

[dano]

In my experience, settle early, settle often keeps your small business on track. While settling seemed wrong to me on principle (the patent was absurd), the cost of fighting far exceeded what my company could afford. I got on the phone with our corporate outside council and the plaintiff to explore our options. Their first question was "Are you a $100 or $200 million dollar per year company?" Uh, yeah, we think you have the wrong idea... In the end we settled for $50K, the equivalent of about two months legal fees to fight the suit. In the end it was the right decision as we bought certainty. Even ten years later this settlement bugs me, but it was the right thing to do.

[ttoinou]

What about defending itself against patent issues in general ? Patent trolls are only a degeneration of an already-bad system

[danial]

The article links to an entrepreneur.com article that talks about anti-troll alliances. I had my business join one of the mentioned organizations UnifiedPatents a while ago. It was free for me (smaller companies and startups) and the on-boarding process was pretty straightforward.

[q3k]

4. Not be based in the US.

[nickpsecurity]

A guy that taught me a lot about designing hardware said his company refused to sell to U.S. buyers specifically to avoid patent suits. He said it's also why they did so much obfuscation and NDA's. He said it also works so long as they don't pay a company like ChipWorks to reverse engineer your stuff looking for infringements. Then, it still works given that's expensive enough that most parties that could sue won't do it. So, obfuscation and staying away from U.S. were effective strategies.

I thought it had negative implications for competitiveness or financial sustainability of open-source hardware. On top of regular challenges, they might get sued more since the infringement is visible in the source.

[mcherm]

Unless you also do not sell in the US this won't help.

[baybal2]

>What Can Small Tech Companies Do About Patent Trolls?

Move to China

[sctb]

Please stop posting unsubstantively or we'll ban the account.

https://news.ycombinator.com/newsguidelines.html