3 ms·

I'm the author. It's actually kind of hard to say at this stage, and the judge suggested amicus briefing to help the Court figure out what to make of all this.

jrmg 4y ago
The article says “All they had to do was become the owners of a patent assertion entity, and accept the "liabilities" that come along with that.” Can you say more what this means? What were the risks these people were (I would guess unknowingly) accepting in return for their 5-10% if things went ‘well’?
- Andrew_Russell 4y ago
  They seemed unsure at the hearing of what exactly they had signed up for. Certainly, their LLCs could be subject to attorneys fees if the Court awards fees (which it generally only does in exceptional cases) or for sanctions based on attorney behavior. However, normally, only their LLCs would be liable rather than the owners personally--unless they fail to observe the corporate formalities.
  - FireBeyond 4y ago
    > They seemed unsure at the hearing of what exactly they had signed up for. One even had no idea what the name of the patent "he" owned was, or what it was for.
  - ThePowerOfFuet 4y ago
    > However, normally, only their LLCs would be liable rather than the owners personally--unless they fail to observe the corporate formalities. Failing to observe which formalities in particular would expose them personally to such liability?
    - gnopgnip 4y ago
      Commingling assets, undercapitalization
  - shellfishgene 4y ago
    Once they own the patent, could they not break with MAVEXAR and keep 100% of what they would get from the litigation? In theory, I'm aware they probably had neither the know-how nor the funding.
- javajosh 4y ago
  It sounds like a trade. I give you a patent, aka cause of action, and in return you cut me in on your winnings. But if you lose you're on your own. It spreads downside risk directly. It also makes unraveling the real interests harder. It's a clever, evil hack of the justice system. It's very cool this judge uncovered it. I hope they get nailed and I hope we close these loopholes.

jrmg 4y ago

The article says “All they had to do was become the owners of a patent assertion entity, and accept the "liabilities" that come along with that.” Can you say more what this means? What were the risks these people were (I would guess unknowingly) accepting in return for their 5-10% if things went ‘well’?

Andrew_Russell 4y ago
They seemed unsure at the hearing of what exactly they had signed up for. Certainly, their LLCs could be subject to attorneys fees if the Court awards fees (which it generally only does in exceptional cases) or for sanctions based on attorney behavior. However, normally, only their LLCs would be liable rather than the owners personally--unless they fail to observe the corporate formalities.
- FireBeyond 4y ago
  > They seemed unsure at the hearing of what exactly they had signed up for. One even had no idea what the name of the patent "he" owned was, or what it was for.
- ThePowerOfFuet 4y ago
  > However, normally, only their LLCs would be liable rather than the owners personally--unless they fail to observe the corporate formalities. Failing to observe which formalities in particular would expose them personally to such liability?
  - gnopgnip 4y ago
    Commingling assets, undercapitalization
- shellfishgene 4y ago
  Once they own the patent, could they not break with MAVEXAR and keep 100% of what they would get from the litigation? In theory, I'm aware they probably had neither the know-how nor the funding.
javajosh 4y ago
It sounds like a trade. I give you a patent, aka cause of action, and in return you cut me in on your winnings. But if you lose you're on your own. It spreads downside risk directly. It also makes unraveling the real interests harder. It's a clever, evil hack of the justice system. It's very cool this judge uncovered it. I hope they get nailed and I hope we close these loopholes.