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Run the numbers: Assuming you need a legal staff of 20 with avg cost 500k per. So that’s 10 million per year. Double it for rent, SGA, etc. we’re at 20 million
by wombatpm 4y ago
Run the numbers:
Assuming you need a legal staff of 20 with avg cost 500k per. So that’s 10 million per year. Double it for rent, SGA, etc. we’re at 20 million per year.
Offer a protection package at 10k per year, you need 2000 paying customers. Since all the lawyers are on staff, you can have them invalidating patents when not defending case. If you structure it like a mutual insurance company, you could return a portion of premium based on expenses once a war chest is amassed.
Is this something I could take to y-combinator?
- jbms 4y agoMaybe YC could be the target customer? They bankroll a single company as insurance against all their investments being targets of attacks. They can afford it. They might attract all the best startups as a result, if those feel better protected.
- leaflets2 4y agoAnd it's in YCs self interest to make their startups safer? Wouldn't this be in all venture capitalists self interest? (Not only YC) Maybe they could join (or start their own)
- Waterluvian 4y agoThis is a great idea but it needs to be executed by lawyers, not tech people. Please not another tech startup of lawyers.
- gregsadetsky 4y agoReally good idea to bring it to yc - they know how much legal fights like these have cost across all of the cohorts. And obviously they would pitch it internally to all existing + future startups. Maybe this is what ends this garbage once and for all?
- 8ytecoder 4y agoI think $10k/yr is fairly reasonable even for startups. However, a lot of these trolls go after small businesses, don’t they?
- gshulegaard 4y agoI mean kind of. They have to go for people that have money to pay them off, but not enough to make fighting them worth it. Startup is kind of nebulous, but there is a difference between a 40+ million series B startup and a small business that would balk at $10k a year. I would guess the trolls go for more of the former than the latter.
- tiernano 4y agoYou could do different levels of protection. Have a smaller tier for smaller companies (less than a million revenue a year) for maybe 500 or 1000 a year, then larger companies pay a more. If you get one of these lawsuits, do what cloud flare have "I'm under attack" style join.
- btown 4y agoThat's the key to it all - you have HR startups, insurance firms, cybersecurity firms etc. bundle the cost of patent troll insurance into their product, give them a commission, and have them sell it to small businesses - not just startups. Then you can keep the price much more affordable because you have an economy of scale!
- wombatpm 4y agoExcellent idea! That makes the potential market huge.
- djsamseng 4y agoJust make sure you include a way for the rest of us non founders to donate to the cause! Time to start building a neural net to invalidate patent trolls.
- dmix 4y agoThey could do a substack type of blog or Youtube channel documenting their battles and covering the issue. Become the industry expert that all the media sources from. Content is always super valuable for companies with a social good angle.
- bigDinosaur 4y agoI like it, although you left out the part where your other business arm researches potential troll lawsuits before they happen and goes after companies who don't pay you protection money. /s
- ddalex 4y agoI'm establishing another organisation that provides mutual protection for companies that look to protect their valuable IP by actively fighting against dismantling of patents, and systematic shakedowns by anti-patent organisations .... oh wait
- ENGNR 4y agoIt's true, it needs to be a social enterprise that ultimately makes itself redundant. What if a % of all revenue went into a warchest that built over time, and if it ever achieves the goal (of eliminating themselves) it got paid out to current shareholders
- dicknuckle 4y agoNah, this all makes WAY too much sense. It will somehow get regulated to shit when millionaires somehow convince lawmakers this is somehow illegal.
- huhtenberg 4y agoAt 10k a year this is very unlikely to work. Few startups will pay that to protect against a threat that, practically speaking, is very rather unlikely. The fee needs to be an order of magnitude lower. Incidentally it will open up this service to a much wider range of companies, so it may actually be easier to pull off.
- nspattak 4y agoone does not need to start with 20 people, if one doesn't have enough paying customers either...
- denton-scratch 4y agoThey don't really need to employ lawyers at all. It's just an insurance club. They need an actuary, an accountant and a clerk. They can pay law-firms to do the lawyering, and contract researchers to dig up prior art. That way, the main costs arise on a per-case basis - only the office staff are fixed costs.
- TylerE 4y agoThat's seem to make a startup LESS attractive companies, no? One bad case and the whole thing runs out of money. This is the kind of service you'd want provided by somebody "too big to fail".
- wombatpm 4y agoTrue, but the goal is to fight patent trolls or non practicing entities. Not take on legitimate cases of patent infringement against Oracle or Intel or Apple
- TylerE 4y agoWinning an straightforward case in the American justice system can be quite expensive, especially when the plantiff goes judge shopping (which they all do, it's part of what makes a patent troll a patent troll).
- thathndude 4y agoLawyer here. I love this idea. I think you make this work even better with a lot of part-time lawyers forming an army. In a world of remote work, I think it would be an appealing proposition. 100k for 10 hours a week of part time work.
- wombatpm 4y agoGood point. I did not consider part timers. I was also thinking that former patent examiners could be brought on as well.
- PatentlyDC123 4y agopatent lawyer, giving it a +1 too
- EricE 4y agoExcellent point - remote work/part time does throw a whole new wrinkle on this!
- koheripbal 4y agoReturning unused premium makes it a "mutual" insurance company, legally. This has specific legal and tax implications. One of the big constraints of insurance companies is the differing laws in each state and province, so don't underestimate the corporate/legal/tax/accounting/operational/compliance reporting/etc costs in EACH jurisdiction.
- wombatpm 4y agoGood point. Although the thing you are insuring against is federal lawsuits. So maybe a different structure like a non-profit?
- nix0n 4y agoAs far as I understand, most US corporations legally reside in Delaware, and patent trolls like to file suit in East Texas, so the burden of this might be considerably less than for insurance sold to individuals.
- rakoo 4y agoIt's like patent trolls are a parasitic industry acting against the betterment of society and they should be fought by public instances paid for by everyone
- ncr100 4y agoRunning the numbers is exactly what patent trolls do so yes it seems like a valid approach. Reading down the Twitter feed from the troll in question shows a Tweet of a discovery by them and their lawyer that it's cheaper to deal with the court costs of trafficking 15 kg of cocaine than to legally assert a patent. This of course can be read two ways like what a shame because it's a sin to use cocaine and not a sin to legally assert your intellectual property rights, however in context, it's so much more sinister scenario of shaking down legitimate businesses for illegitimate reasons.
- gbronner 4y agoExactly. The costs of discovery are high and assymetric. A decent lawyer can legally cause a defendant to run up a monster bill long before this gets anywhere near a trial. It is legal extortion.
- aagha 4y agoI suspect a large company like Salesforce would fund a decent chunk of this and write it off as goodwill.
- mrcheesebreeze 4y agoToo genius of a plan to be just sitting here. Go do it, you seem to have a good plan that seems feasible, there must be some people with capitol willing to hop on board. A new insurance we never even knew we needed.
- wombatpm 4y agoI know. The positive response is amazing
- axelsvensson 4y agoContact me if you're serious about this, I have some input.
- nullc 4y agoA non-attorney can't own a lawfirm in the US.