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.
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.
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 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.
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.
Of course, if all of those who sign up are willfully infringing legitimate(ish) patents, the calculus changes a bit. Perhaps the insurance company would insure against particular patents?
Odds are, trolls would only coordinate as a last ditch effort. And if that happens, patent troll insurance would be so popular there would be other services that would offer this, making it harder for them to take it down.
I would be okay with those problems compared to my current risks.
I think one key problem around insuring these risks is that it'd be difficult to price and value. To price/value you need to understand the cashflows for the insurance product in terms of premiums and payouts. Life, Health and General insurance all have analytical methods that rely on historical data to determine the likely-hood of a payout. For this type of insurance there isn't the same level of historical data.
Also, the regulatory regime for insurance companies is moving towards a risk/shock based approach - this is the case in Europe (or will be eventually), with the ROW expected by the industry to follow similar approaches. So for an insurance product such as this, an insurer would probably need to understand what happens if the level of payout incidence is stressed (say doubled) - given that the incidence of payout isn't well understood and the liability when you do payout is likely to be quite high, would result in what the market would probably consider to be an expensive product.
The protection racket shape of this whole thing is a bit worrying though.
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.
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.
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.
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?
Again, not a lawyer, but this is my understanding.
(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).
Don't some insurance companies already do legal expenses insurance?
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.
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.