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That really won't solve anything - most (perhaps all) patent trolls use shells so that they have no liability.

It's been a couple of years since I first had an idea, and realized I'm definitely not the first who thought about it: IP Tax. If IP is property, it should have property tax (a discussion here: http://news.ycombinator.com/item?id=2855835 ).

While I'm not for taxes in general, among all the suggestions that I've found (loser pays, shorten patent period, refuse granting more software patents, etc.) this is the only one that:

a) puts newer and older patents on equal footing (thus, no "grandfathered trolls" get a free pass), meaning you can implement it as quickly or gradually as you want without being unfair to either existing or potential patent holders.

b) makes shell games and international games much less appealing and useful[1]: If you want to sue in some jurisdiction, you have to have a skin in the game, both financially (proportional to how much you will be able to extract with a lawsuit), and jurisdictionally - you have to have a tax paying nexus.

I'm still looking for other suggestions, and this one isn't "good", but it's the best I can find.

When you are criticizing (and I welcome criticism), please try to remember that the most relevant alternative is "existing patent regime" (and the need to switch from it to a new regime), then other suggestions such as loser pays, shorter terms, etc - and only finally "no patents at all" - because it seems most criticism I received so far assumes we're starting from a "no patents at all" world.

[1] this is the game played by IV and their friends: set up tens of companies, each owning the next, and each in a different jurisdiction (e.g. NY owns dutch owns british owns cypriot owns turkish owns Delaware owns hungarian owns french owns .... owns dutch owns turkish owns ... owns US corporation that owns patent suit rights). The cost of setting up this structure is less than $1000/company/year (in many jurisdictions, and especially if you do this en masse, down to $100-$200/year). However, piercing it is an exercise in futility and is more of the order of $10000/company - and if you try anything more than discovering ownership chain, more like $100,000 company)




Then we must increase the liability. When patent owners want to sue for damages worth $1000000, make them pay $1000000 in a 3rd party bank account BEFORE that.

If they win, then they get their money back plus the damages. If they lose, then the defendants can pay their legal costs from those $1000000 (and the reminder goes back to the patent owner).


I am in favor of that solution, but there needs to be some constant of proportionality:

If you have a patent worth $1M, it is reasonable that you can finance a $1M bond.

If you have a patent you believe (and sue for) $400M, it is less likely that you'll be able to finance that bond unless you are Microsoft.

So, it needs to work out to a percentage (1%-5%) of what you sue - but probably something like "and you lose at least half of that even if you pull it back the next day".


nothing personal, but please tax this idea.. burn it, and bury the ashes somewhere deep, never to be seen again


My decoder ring says you don't like the idea. That's ok, you don't have to. I just wander if you have any objective (or even subjective, for that matter) criticism other than "I don't like it"?




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