
A simple no-brainer approach to patent trolls - jaf12duke
http://blog.42floors.com/patent-troll-insurance/
======
pmichaud
The idea is maybe clever, but it has at least 2 major downfalls.

1.

The system is gamable by the trolls. Hurricanes don't care if you're insured,
but trolls have an interest in taking troll insurance down. The way insurance
works means that if you have a statistically unlikely run of bad luck, you
could topple the whole insurance enterprise and leave those who thought they
were covered out in the cold.

If I were a troll, I'd get together with other trolls and coordinate enough
legal pressure that it was impossible to go to court on all the pending cases
at once.

2.

Having insurance like this legitimizes the whole trolling issue, instead of
fixing the systemic issues that cause it in the first place. You might think
that doesn't matter since we can't really fix the trolling issue, but we can
(maybe) create insurance to route around the problem. But here's why it
actually does matter: if the troll insurance works and isn't killed by my
point #1, then we've actually created a lobbying group with a vested interest
in keeping trolling alive. In other words, the organization we created to
protect us, if it actually works, will have strong incentive to work against
our long term best interests by allying themselves with the trolls they are
supposed to be protecting us against.

We'd essentially be creating a protection racket to extort /ourselves/.

Can't see this working.

~~~
jsmeaton
> then we've actually created a lobbying group with a vested interest in
> keeping trolling alive

That was my first thought when reading this article. It's a shame that lobby
groups can petition for outcomes that are worse for everybody but their broken
business model - where profits are the only virtue worth considering.

Lobby groups for keeping marijuana illegal[0] perfectly describe this.

Google, Microsoft, Apple, Samsung, and any other big tech-player need to band
together, form a lobby group, and destroy software patents. It should be in
their best interests considering all the patent litigation that goes on among
them.

[0] [http://www.republicreport.org/2012/marijuana-lobby-
illegal/](http://www.republicreport.org/2012/marijuana-lobby-illegal/)

~~~
foxylad
> Google, Microsoft, Apple, Samsung, and any other big tech-player need to
> band together...

But they won't - Microsoft and Apple are patent trolls themselves, now, and it
won't be long until Google and Samsung join them.

It works like this. Startups have no patents, but as they grow and succeed
they accumulate them. Eventually they get lazy and start to rely on their IP
for income, rather than continuing to develop valuable new markets.

Microsoft is a great example of this arc, making more money licencing
unspeakable patents to Android than they do from Windows Phone. Apple are
going that way - their heyday is over and patents are becoming more important
to them. Google is currently not over the hump yet, but give them ten years.

------
nyan_sandwich
My understanding is that patent trolls persist with bogus patents because it's
not in any one firms interest to challenge them. When it's a central insurance
company taking the risk, they have much more incentive to do damage to the
trolls. This is a good feature of this scheme.

The protection racket shape of this whole thing is a bit worrying though.

~~~
vinceguidry
One of the more interesting things I read in Derek Sivers' book was about the
mob. A cab driver he was chatting with indicated that the mob system was
easier to work with than the government that replaced it when the city
legitimized. You paid people for nothing more than keeping them off your back,
sure, but you had someone to turn to if you got leaned on by someone else, in
a town filled with assholes willing to break your arm on a pretext.

The mob had no incentive to shut commerce down, only to extract a rent. It was
pretty straightforward, you set up shop in a certain part of town, and you
knew the mob controlling that area would be around to "welcome" you. Paying
them off is a cost of doing business. They have to be reasonable because if
you get shut down, they won't get paid.

Compare that to the environment we have here. Trolls have no interest in
keeping you around, and there's no way to work them into a business plan. The
only thing you can do is set up shop and pray.

Personally, I'd rather deal with the mob.

------
_greim_
What if the insurance only covered court costs. If you lose, you have to pay
the patent troll. It sounds bad, but trolls would then face a furious fight
every time.

~~~
pegas123
Then the insurance have an incentive to pick for you a lawyer who loses fast.

------
jaxomlotus
This idea already exists. RPX Corp. Costs a fortune though! Can be 6 figures a
month...

------
drealize
RPX Corporation (RPXC-NASDAQ).

~~~
temuze
I didn't know they existed. Apparently they have a whole program for this:
[http://www.rpxcorp.com/rpx-npe-litigation-
insurance](http://www.rpxcorp.com/rpx-npe-litigation-insurance)

------
phonon
I've also seen this [http://www.altageneral.com/patent-
insurance.php](http://www.altageneral.com/patent-insurance.php)

[http://www.youtube.com/watch?v=tHDPpjca19s&feature=player_de...](http://www.youtube.com/watch?v=tHDPpjca19s&feature=player_detailpage#t=182)

------
daughart
Patent Litigation Insurance™, a new product from Intellectual Ventures®.

------
memracom
You can't take Lloyds of London down so easily. That's where you should start
shopping for a policy, because the dealers at Lloyds are ultimately the ones
who set the prices for any insurance anywhere in the world.

------
YokoZar
How about insurance that contractually requires me to never settle and pays
for me to fight until the patent is declared invalid? That way I look like the
worst possible troll target.

------
tluyben2
I for one would say the no brainer solution would be to abolish patents. I
know blah blah medical research, years investment blah blah, but after the
investment is made back, it is abused again. And shit like Monsanto.
Abolishment would be best imho. But as that's not in the cards, the next
simple thing would be; if you (the company the patent belongs to, bought or
created; not a partial parent owner, not some entity you have shares in; no,
the physical company) are not actively creating, selling and marketing a
product(s) the patent(s) are about, you cannot attack companies who are. If
the 'enemy' openly started selling/marketing/producing with the product before
you did, you are just out of luck; even if you create it after that you cannot
sue. This is easy to check and follow up; there will be thousands/millions
traces of actual sold and delivered product to end clients on tax papers,
logistics papers, manufacturing papers etc which proves who was first.

So if you had the patent, which was supposed to be _original_ in the first
place, then, because it was so 'original' (saying 'original' because at least
in case of software it just never is and many(most) hardware cases aren't
either) you could've easily been the first to exploit it right? If not; sorry
for you, your patent lands in /dev/null. Will never happen but seems to be a
logical and solid way of doing this.

Oh yes, and make the patent related to the investment used to come to it; you
have to provide paper trail what 'enormous and painful investments in time and
money' you did to get to that 'one click payment idea'; you can only sue
others until your company made that investment back times X (X=10 or
whatever), not after that.

------
programminggeek
Patents are a good idea for rewarding people with original ideas. If they were
required to stay with the original owner and weren't transferrable, this would
be a different (and similarly problematic issue), but as patents have value
and are transferrable, they will be bought and sold as investments by various
people/corporations/whatever.

In theory patents are maybe a good idea because it provides exclusive rights
to "own" an idea for enough time to extract value out of it by selling a
product or service around it (if you so choose). You could argue that software
patents lasting 20 years is "too long" for technology. You could also argue
that patents aren't worldwide enforceable so, you need to get one everywhere,
or basically you can't enforce it.

I don't really know that you can "fix" patents without throwing them away and
rethinking them, but on a system as large and impactful as patents, the
repercussions might be a lot worse than the problems we have now.

------
alok-g
I have been wondering about possibility of another approach, which is limited
to B2Cs. Since I am not a lawyer, I do not know if this can actually work.

Instead of manufacturing or selling the product directly, you open-source the
design while maintaining the copyrights (or even patents-coverage if needed)
over it. You now do contract manufacturing of the design for the buyer and set
up the legal agreements / EULAs accordingly. While it is the buyer now who has
the risk of being sued, the troll I assume is unlikely to go after every small
individual customer.

You maintain the copyrights (or patents) on your design just to prevent your
competitors from freely copying it, though you promise not to sue the buyer
himself for this IP as usual in the agreements.

Does anyone around here think this is correct / feasible? Any lawyers here?

~~~
URSpider94
From my layman's understanding, this doesn't work. Just because you are
building something as a work-for-hire doesn't immunize you from being sued, if
you are violating someone else's patents in the process. You can have a
contract with the buyer that says that the indemnify you in the event of a
suit, but the way that works is that you still get sued and then you can go
after the buyer to cover your costs when you lose or settle.

Again, not a lawyer, but this is my understanding.

------
Nimi
This is probably not a good idea, but what happens if the "badge" on the site
is simply a link to a binding contract that forces the company to always fight
patent lawsuits in court? No insurance or anything, a simple way of signalling
that they will go to court no matter what.

(I believe there's a legal construct where a company can sign a binding
contract with itself, overseen by a notary or something like that)

Now we replaced the rational actor the trolls faced, with an irrational one -
the company simply _can 't_ settle, this is going to court no matter what.
Trolls no longer have an incentive to sue such companies, though if they do,
the company is in big trouble (though, possibly not forced to shut down).

------
danielharan
How about a "white-hat" troll? Get a bunch of patents, and threaten small
players: you either join us, paying for insurance and lobbying OR we try and
sue you.

------
femto
An alternative would be for a bunch of like minded companies to band together
and form an alliance. If one of them gets trolled, the others contribute to
their defence. "One for all, all for one." You'd want to trust your allies, or
put some limits in place to keep flagrant patent breaches outside the
agreement.

Don't some insurance companies already do legal expenses insurance?

~~~
marcus_holmes
It's a great idea, but it faces the small problem of solving nothing if all
the participants get trolled, which they likely will.

------
microcolonel
Something like malpractice insurance I guess. It'd create an interesting
dynamic between trolls and troll insurance policy providers.

You'd have the insurance providers lobbying to reduce patent trolling, just as
trolls will be lobbying to allow for more.

The thing about this, is that instead of just the latter, we'd have both
sides. If anyone wants to make this happen I'm on board.

------
JoeAltmaier
Yeah, the insurance business is so sensible and orderly, adding that to the
mix would surely make everything ok.

------
crisnoble
Is this not exactly what Intellectual Ventures offers?

------
marcus_holmes
personally I think the only way of stopping the trolls is to insist that the
only litigant who has standing to bring suit on a patent is someone who:

a. Has the relevant patent

b. Is producing a product based on that patent which would be harmed by the
alleged infringement

This would continue to protect actual inventors who actually make something
(and the drug companies for whom the patent system really does work) but stop
the trolls.

------
TylerE
As a rule, insurance doesn't insure against Armageddon. This would be like
trying to get Geico to cover a top fuel dragster.

------
aaronchriscohen
This would be like selling car insurance to demolition derby drivers. It would
never, ever be profitable.

------
osipov
the guys at fightthetroll.com are also doing something along these lines

------
spiritplumber
A simple no-brainer approach to patent trolls: bit.ly/18Loez4

------
ExpiredLink
Great idea. Fight capitalist excess with capitalism.

