25 Feb 2013 dmarti   » (Master)

A patent troll defense scheme

Depressing piece from RPX: Quantifying the "Fight Hard" Strategy. This kind of “fight hard” stance against NPEs has always held tremendous emotional resonance. Its economic foundations, however, have been more elusive, and while dodging an approximately $25 million dollar verdict – based on the judgment of $2.5 million and a $.15/transaction running royalty – is always cause for celebration, it is worth noting that Newegg’s victory didn’t come cheap.

The big problem is that it's hard to convince a troll that you actually have a Fight Hard strategy and not a Put Up A Fight And Then Settle Strategy. Eugene Kaspersky wrote, From our (KL) side – we’ll fight the trolls until the last round of ammunition (their round!). If they attempt to just sneeze in our direction – we’ll be back at them in a flash and take no prisoners.

Kaspersky is credible because he has already done it. But are you? The troll probably figures that even if you want to fight hard, your board of directors will make you wimp out. So you won't get the same protection that a credible Fight Hard company has.

So here's a possible solution. Sign a contract with me, agreeing that if your company ever licenses from a troll or settles with a troll, you'll pay me ten times the amount first. You may not have established a credible Fight Hard position on your own, but you can show the troll that you don't have a viable alternative. (The contract will let you go out and license all the patents you want -- the protection just kicks in when an NPE contacts you with a licensing demand.)

I don't expect that any of my counterparties will ever have to pay me, but if anyone does, I'll figure out some productive troll-fighting things to do with the money.

Syndicated 2013-02-25 16:33:12 from Don Marti

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