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Years ago I read the book "Radical Markets" by Glenn Weyl and Richard Posner. One of the ideas was a system of property tax system in which you pay property tax

Years ago I read the book "Radical Markets" by Glenn Weyl and Richard Posner. One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. So a bit like a land value tax but fully general (can be applied to anything) and also sidestepping the issue of how to actually determine the the "value" in land value. While this would pose obvious practical problems as a system for property taxes, it seems like it might actually be a good system for patent taxes. Basically, you should have a to pay a patent tax to hold a patent. You can declare whatever value you want on the patent but have to also be willing to sell the patent at that declared value (or maybe just license it). I haven't thought it through really (just an idle thought) it certainly seems like it would basically destroy the business model of "patent trolls" and curb the practice of major tech players accumulating a huge portfolio of dubious patents as a cudgel they can threaten smaller competitors with.

jurynulifcation 3y ago
I don't see how it would destroy patent trolls. If anything it would just give them more runway, wouldn't it? They declare a high price they're happy to walk with and then continue trolling people with their patent. Corporations will pay the tax to maintain their patent and occasionally engage in minor amounts of corporate raiding against each other by "stealing" patents back and forth they otherwise maintain in perpetuity. Also, what if I build a business on my patent and someone purchases it away? Does the business go, too? Do I get a license? So on and so forth. This seems like an almost guaranteed worse system than we have already.
- cgio 3y ago
  I am assuming the GP also implies taxation on the value claimed for the patent. Tangentially, I would also love the equivalent option the other way around, I.e. in property taxation, where the government decides the value of the property, to also be obliged to buy the property at that price if so asked by the owner, an option contract of sorts.
- thinkharderdev 3y ago
  Maybe, like any system it almost certainly looks better on paper than in practice and I haven't thought about it too hard. Mostly I thought it was an interesting idea. > They declare a high price they're happy to walk with and then continue trolling people with their patent They can if they want but by declaring a high price they are also then obligated to pay a lot of taxes. So the system disincentivizes both under and over estimating the value of patents. It also incentivizes property going to the highest value use. So if I can do something more valuable with your patent than you are able to do (for whatever reason) I can afford to pay for it more than you can afford to pay the tax.
freedomben 3y ago
Much like property taxes, this can easily result in forcing the holder to sell due to insufficiently liquid assets to pay the tax with. The classic example is the poor person who inherits a nice house but can't pay the inheritance tax (and/or subsequent propery taxes), and is thus forced to sell the house in order to pay the taxman. If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that.
- nayuki 3y ago
  > poor person who inherits a nice house but can't pay the inheritance tax I don't see the problem. Sell the house, use the remaining cash to buy a smaller house. The whole point of the inheritance tax is that you're not entitled to the whole amount of the inheritance.
- thinkharderdev 3y ago
  > If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that. I agree and in cases where sentimental value is a real concern I think there are obvious problems with this sort of system. But I also think there are a lot of domains where this isn't really a concern such as patents. > The classic example is the poor person who inherits a nice house but can't pay the inheritance tax (and/or subsequent propery taxes), and is thus forced to sell the house in order to pay the taxman. This is an entirely separate issue but this also seems entirely solvable in our current system of inheritance tax. You should just inherit the original cost basis along with the asset. So if you don't want to sell your inherited house you don't have to. But if you do then your taxes should be paid based on the original cost basis.
  - quelltext 3y ago
    That cost basis inheritance thing is done in Japan actually, on top of inheritance tax, mind you.
- pgwhalen 3y ago
  > If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that. Definitely true, but on the other hand, "sentimental value" seems to be the root cause of most societal housing problems. I don't want to speak with certainty, but I do wonder if society would achieve overall better outcomes if we shifted our mindset a bit.
Nitrolo 3y ago
That's already how this works, basically. You have to keep paying a fee to keep your patent, and the fees increase with each year of the patent. The fees are fixed, but the effect is pretty similar to what you describe. In some jurisdictions you get a discount on the fees if you declare that you are open to licence out your patent. Then everyone can use your invention without having to ask for permission,as long as they pay the license fee. EDIT: I looked it up, in Germany (§ 23 PatG) the patent office can set the licence fees that others have to pay, so you can't play games by just setting the fee to a trillion euros.
- qwytw 3y ago
  > effect is pretty similar to what you describe. The max yearly fee is $7,400? It can be a lot or absolutely nothing depending on a specific patent. > In some jurisdictions you get a discount on the fees if you declare that you are open to license out your patent. Would it really ever be worth the effort just to save a few thousand per year at most? 3,700 if you're a non profit or < 500 employees.
- thinkharderdev 3y ago
  The difference would be that the fee you have to pay is scaled to the value someone else can get from the patent. So if you have a patent which is not valuable to you but is valuable to someone else, then you either have to sell the patent to them or pay a tax based on what value they could get from it.
- pgeorgi 3y ago
  §23 PatG covers the case where the patent owner wants to use a general public licensing scheme offered by the patent office to avoid having to deal with every single licensee. That one is opt-in by the patent owner. §24 PatG offers a compulsory licensing scheme, but it requires not only that the would-be licensee made an effort to find an agreement with the licensor, but also that such a compulsory license is in the public interest. Since the public interest doesn't seem well-defined in PatG, you'd have to check older cases to see how that turns out, but I'm not sure if even "doing so reduces bandwidth use on the internet" is enough: you still have the option of using another codec and compensate the worse compression by going for lower resolution video, for example. 4K video is not a human right ;-) (and "we hog internet resources" is the last thing Netflix et al want to say out loud anyway: ISPs are eager enough as-is to try to get them to pay up for access to their customers.)
djfdat 3y ago
Wouldn't this further entrench the patent problem? Companies with a lot of money would be the only ones able to fend off patent trolls. Patent trolls will be more easily able to aquire patents through a regulated system, and likely for cheaper, since people may list them low just for "holding" since they can't afford to list them high and pay the patent tax.
i_am_jl 3y ago
>One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. Reminds me of Folkrace, a Scandinavian form of motorsport where they use a similar system to enforce cost caps. https://en.wikipedia.org/wiki/Folkrace https://en.wikipedia.org/wiki/Folkrace
- m-ee 3y ago
  24 hours of lemons has a similar rule. As far as I know the race organizers have only ever taken the option to purchase a car once. A friend of mine raced lemons for years and said the biggest offenders were people who put way too much money into fox body mustangs, but it was a non issue since those guys inevitably crashed before the race is over.
  - cassianoleal 3y ago
    > A friend of mine raced lemons for years I'm sure this is a typo and you meant Le Mans but please leave it as it is. :D
    - jdietrich 3y ago
      No, there really is a race called the 24 Hours of Lemons. It's an endurance race for cars that cost less than $500 and it is hilarious. https://24hoursoflemons.com/ https://24hoursoflemons.com/
      - cassianoleal 3y ago
        Aaaaah! Thanks for that. Yep, that's even better! :D
em500 3y ago
> One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. A refinement would be that the government agency / tax office also needs to submit an appraisal value, with the catch that they are required to purchase the property for that value if the owner wishes to sell. This balances incentives on all sides to submit realistic values. The final appraisal value would then be the average of the owner and the government appraisal value.
freejazz 3y ago
What makes you think patent holders don't want to license? Patents are already a significant financial investment. Also, patents are already financialized. I was litigating against a patent-holding defendant that used their IP holdings as collateral for a large bank loan. Patent trolls would much rather license their technology than litigate it, it's the big companies that refuse to license.
thaumasiotes 3y ago
> One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. So a bit like a land value tax but fully general (can be applied to anything) and also sidestepping the issue of how to actually determine the the "value" in land value. The other thing you can say about that is that it's guaranteed to assess property at values that are too high. You buy things when their market price is less than the amount you'd be willing to sell them for. This is a scheme to simultaneously tax the market value of the property and the gains from trade that made someone willing to buy it at all.
- thinkharderdev 3y ago
  > The other thing you can say about that is that it's guaranteed to assess property at values that are too high How so? It seems like it would lead people to asses things at the "correct" value (eg the value at which you would actually sell the asset). So if you buy an asset for less than it is worth to you then you still have a valuable asset, you just need to pay a tax on that asset. Where this would obviously break down is with personal property that has some sentimental value. It would be unjust for people to either have to sell a treasured family heirloom or else pay an exorbitant tax to avoid selling it, but if restricted to domains where that is not a consideration (like patents or other corporate assets) it seems like a good system to me.
  - DSMan195276 3y ago
    > It seems like it would lead people to asses things at the "correct" value (eg the value at which you would actually sell the asset). The price you would be willing to sell at is not the same thing as the value of the property. I might only be willing to sell my house for $500k, but that's not the value of my house because there are no buyers at that price. The value is supposed to represent the price at which you could actually find a buyer for, so any listed valuations that people _aren't_ buying the property for are too high.
ralferoo 3y ago
> The catch is that you are required to sell to anyone who offers your declared value. This sounds terrible for owners and perfect for governments and rich investors. Governments would love it because it forces people to over-value their property to avoid the risk of their property being snatched from them against their wishes. If you can effectively be evicted from your home just because someone else wants to buy it, there's absolutely no security and you might as well rent, rather than own property. Rich investors would love it, because they can go around snapping up more properties that happen to be "undervalued" and make quick money of it, in a way that's simply not possible for normal people. Say someone bought a house for $100k, declare its value as such, and then demand increases in the area and 6 months later the market rate is $110k. A property investor could then rock up and demand to buy it for $100k and immediately flip it for 10% profit and then move on to the next target. This inevitable consequence is that people would be forced to "value" their house at the maximum they think it might be worth in 12 months time or risk losing their home, or even higher to signal that they really don't want to leave their home, all the while paying more tax than they need to because the actual market price for houses would be lower. Of course, this might also force the purchase prices for housing to be forced higher, so stopping people getting on the property market. All in all, it sounds like a terrible system for most people.
- deleted 3y ago
  [deleted]
- _nalply 3y ago
  Offer a loop-hole? If someone went as far as putting the money in an escrow account to buy out your asset, you could retroactively increase the declared value. This of course has a price: You need to retroactively pay the tax for a few years and a surcharge for the expenses of your buyer. This could be repeated, similar to an auction.
- mschuster91 3y ago
  Homes where one lives in are usually exempt from a lot of taxes in many jurisdictions of the world. For rental properties, I'd love to see this happen, it would IMHO significantly drive down prices from the current overvaluation.
Jeff_Brown 3y ago
That seems bad, because you should hold an investment if and only if it is profitable. If anyone can take your investment from you as soon as they see it is profitable, you'll have no reason to invest.
- thinkharderdev 3y ago
  They can't take it from you because you can declare a higher value. You would have to pay more in taxes on it, but it should still be profitable. The whole point though (according the authors) was that if it were MORE profitable to someone else (because they had complimentary assets or some ability to use it in way that you can't) then it is better for that person to buy it and create more value from it. To take a completely contrived and unrealistic example, imagine that you owned a piece of land with some rare plant that can be turned into a cancer cure. This plant ONLY exists on your land. Obviously this land is extremely valuable to someone who can actually bring the cancer drug to market. You can of course refuse to sell the land (it is your land to do with as you want) but it seems sub-optimal for society for you to do so. Under this system you would either have to pay a really high tax or actually sell the land to someone who can make the cancer drug
  - Jeff_Brown 3y ago
    You may have convinced me. I was going to respond, "What's to keep the price from rising until I am indifferent between having it and not having it?" But now I realize that would be fine -- I'm not made any worse off. That's a very weird idea but maybe it would work.
falserum 3y ago
Idea is very interesting and thought provoking way to get better appraisals, but it gives too much power to the single buyer over the owner. (E.g. One could force a competitor to incur either additional tax or cost of forced relocation)
takinola 3y ago
The patent troll problem can be solved industry-wide with the formation of a patent-troll legal defense fund. A bunch of companies put money into a fund. If any company (not just the contributors) is sued by a troll, they can apply to the fund to pay for legal assistance (applicable controls can include approval, fund limits, etc). If trolls see that companies are more likely to stand and fight, the cost of trolling goes up and the rewards become much less predictable. Hence, trolls will lose their ability to raise funding to purchase patents and have less troll-surface-area to act upon. This will lead to a vicious (virtuous?) cycle for the troll industry.
- candiodari 3y ago
  The patent troll problem IS solved by a patent-troll legal defense fund. This is exactly what the function of patent examiners is. They are supposed to try to invalidate patents before they have any chance to be applied in court. Of course, it's a government operation.
_lvbh 3y ago
Forcing the sale of property would be terrible for the poor
deleted 3y ago
[deleted]
FireBeyond 3y ago
On a much smaller level, some car races/events (the Gambler 500 - or offshoots, rather, the Gambler doesn't enforce) use a similar model for fairness. One of the competition rules is that you're only allowed to spend $500 on the vehicle. The way it is enforced is that you surrender a pink slip with your entry, and at the end of the event if someone else wants your vehicle for $500+, they can buy it.
mensetmanusman 3y ago
IP arbitrage would be really interesting then, as you could find applications of someone’s IP that they don’t even realize yet. Would love to test out the concept :)

jurynulifcation 3y ago

I don't see how it would destroy patent trolls. If anything it would just give them more runway, wouldn't it? They declare a high price they're happy to walk with and then continue trolling people with their patent. Corporations will pay the tax to maintain their patent and occasionally engage in minor amounts of corporate raiding against each other by "stealing" patents back and forth they otherwise maintain in perpetuity. Also, what if I build a business on my patent and someone purchases it away? Does the business go, too? Do I get a license? So on and so forth. This seems like an almost guaranteed worse system than we have already.

cgio 3y ago
I am assuming the GP also implies taxation on the value claimed for the patent. Tangentially, I would also love the equivalent option the other way around, I.e. in property taxation, where the government decides the value of the property, to also be obliged to buy the property at that price if so asked by the owner, an option contract of sorts.
thinkharderdev 3y ago
Maybe, like any system it almost certainly looks better on paper than in practice and I haven't thought about it too hard. Mostly I thought it was an interesting idea. > They declare a high price they're happy to walk with and then continue trolling people with their patent They can if they want but by declaring a high price they are also then obligated to pay a lot of taxes. So the system disincentivizes both under and over estimating the value of patents. It also incentivizes property going to the highest value use. So if I can do something more valuable with your patent than you are able to do (for whatever reason) I can afford to pay for it more than you can afford to pay the tax.

freedomben 3y ago

Much like property taxes, this can easily result in forcing the holder to sell due to insufficiently liquid assets to pay the tax with. The classic example is the poor person who inherits a nice house but can't pay the inheritance tax (and/or subsequent propery taxes), and is thus forced to sell the house in order to pay the taxman. If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that.

nayuki 3y ago
> poor person who inherits a nice house but can't pay the inheritance tax I don't see the problem. Sell the house, use the remaining cash to buy a smaller house. The whole point of the inheritance tax is that you're not entitled to the whole amount of the inheritance.
thinkharderdev 3y ago
> If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that. I agree and in cases where sentimental value is a real concern I think there are obvious problems with this sort of system. But I also think there are a lot of domains where this isn't really a concern such as patents. > The classic example is the poor person who inherits a nice house but can't pay the inheritance tax (and/or subsequent propery taxes), and is thus forced to sell the house in order to pay the taxman. This is an entirely separate issue but this also seems entirely solvable in our current system of inheritance tax. You should just inherit the original cost basis along with the asset. So if you don't want to sell your inherited house you don't have to. But if you do then your taxes should be paid based on the original cost basis.
- quelltext 3y ago
  That cost basis inheritance thing is done in Japan actually, on top of inheritance tax, mind you.
pgwhalen 3y ago
> If you dismiss any sentimental value, then it doesn't really matter, but real life is a lot messier than that. Definitely true, but on the other hand, "sentimental value" seems to be the root cause of most societal housing problems. I don't want to speak with certainty, but I do wonder if society would achieve overall better outcomes if we shifted our mindset a bit.

Nitrolo 3y ago

That's already how this works, basically. You have to keep paying a fee to keep your patent, and the fees increase with each year of the patent. The fees are fixed, but the effect is pretty similar to what you describe. In some jurisdictions you get a discount on the fees if you declare that you are open to licence out your patent. Then everyone can use your invention without having to ask for permission,as long as they pay the license fee. EDIT: I looked it up, in Germany (§ 23 PatG) the patent office can set the licence fees that others have to pay, so you can't play games by just setting the fee to a trillion euros.

qwytw 3y ago
> effect is pretty similar to what you describe. The max yearly fee is $7,400? It can be a lot or absolutely nothing depending on a specific patent. > In some jurisdictions you get a discount on the fees if you declare that you are open to license out your patent. Would it really ever be worth the effort just to save a few thousand per year at most? 3,700 if you're a non profit or < 500 employees.
thinkharderdev 3y ago
The difference would be that the fee you have to pay is scaled to the value someone else can get from the patent. So if you have a patent which is not valuable to you but is valuable to someone else, then you either have to sell the patent to them or pay a tax based on what value they could get from it.
pgeorgi 3y ago
§23 PatG covers the case where the patent owner wants to use a general public licensing scheme offered by the patent office to avoid having to deal with every single licensee. That one is opt-in by the patent owner. §24 PatG offers a compulsory licensing scheme, but it requires not only that the would-be licensee made an effort to find an agreement with the licensor, but also that such a compulsory license is in the public interest. Since the public interest doesn't seem well-defined in PatG, you'd have to check older cases to see how that turns out, but I'm not sure if even "doing so reduces bandwidth use on the internet" is enough: you still have the option of using another codec and compensate the worse compression by going for lower resolution video, for example. 4K video is not a human right ;-) (and "we hog internet resources" is the last thing Netflix et al want to say out loud anyway: ISPs are eager enough as-is to try to get them to pay up for access to their customers.)

djfdat 3y ago

Wouldn't this further entrench the patent problem? Companies with a lot of money would be the only ones able to fend off patent trolls. Patent trolls will be more easily able to aquire patents through a regulated system, and likely for cheaper, since people may list them low just for "holding" since they can't afford to list them high and pay the patent tax.

i_am_jl 3y ago

m-ee 3y ago
24 hours of lemons has a similar rule. As far as I know the race organizers have only ever taken the option to purchase a car once. A friend of mine raced lemons for years and said the biggest offenders were people who put way too much money into fox body mustangs, but it was a non issue since those guys inevitably crashed before the race is over.
- cassianoleal 3y ago
  > A friend of mine raced lemons for years I'm sure this is a typo and you meant Le Mans but please leave it as it is. :D
  - jdietrich 3y ago
    No, there really is a race called the 24 Hours of Lemons. It's an endurance race for cars that cost less than $500 and it is hilarious. https://24hoursoflemons.com/ https://24hoursoflemons.com/
    - cassianoleal 3y ago
      Aaaaah! Thanks for that. Yep, that's even better! :D

em500 3y ago

> One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. A refinement would be that the government agency / tax office also needs to submit an appraisal value, with the catch that they are required to purchase the property for that value if the owner wishes to sell. This balances incentives on all sides to submit realistic values. The final appraisal value would then be the average of the owner and the government appraisal value.

freejazz 3y ago

What makes you think patent holders don't want to license? Patents are already a significant financial investment. Also, patents are already financialized. I was litigating against a patent-holding defendant that used their IP holdings as collateral for a large bank loan. Patent trolls would much rather license their technology than litigate it, it's the big companies that refuse to license.

thaumasiotes 3y ago

> One of the ideas was a system of property tax system in which you pay property tax based on a property value which you get to declare (rather than some assessment by a third-party or government agency). The catch is that you are required to sell to anyone who offers your declared value. So a bit like a land value tax but fully general (can be applied to anything) and also sidestepping the issue of how to actually determine the the "value" in land value. The other thing you can say about that is that it's guaranteed to assess property at values that are too high. You buy things when their market price is less than the amount you'd be willing to sell them for. This is a scheme to simultaneously tax the market value of the property and the gains from trade that made someone willing to buy it at all.

thinkharderdev 3y ago
> The other thing you can say about that is that it's guaranteed to assess property at values that are too high How so? It seems like it would lead people to asses things at the "correct" value (eg the value at which you would actually sell the asset). So if you buy an asset for less than it is worth to you then you still have a valuable asset, you just need to pay a tax on that asset. Where this would obviously break down is with personal property that has some sentimental value. It would be unjust for people to either have to sell a treasured family heirloom or else pay an exorbitant tax to avoid selling it, but if restricted to domains where that is not a consideration (like patents or other corporate assets) it seems like a good system to me.
- DSMan195276 3y ago
  > It seems like it would lead people to asses things at the "correct" value (eg the value at which you would actually sell the asset). The price you would be willing to sell at is not the same thing as the value of the property. I might only be willing to sell my house for $500k, but that's not the value of my house because there are no buyers at that price. The value is supposed to represent the price at which you could actually find a buyer for, so any listed valuations that people _aren't_ buying the property for are too high.

ralferoo 3y ago

> The catch is that you are required to sell to anyone who offers your declared value. This sounds terrible for owners and perfect for governments and rich investors. Governments would love it because it forces people to over-value their property to avoid the risk of their property being snatched from them against their wishes. If you can effectively be evicted from your home just because someone else wants to buy it, there's absolutely no security and you might as well rent, rather than own property. Rich investors would love it, because they can go around snapping up more properties that happen to be "undervalued" and make quick money of it, in a way that's simply not possible for normal people. Say someone bought a house for $100k, declare its value as such, and then demand increases in the area and 6 months later the market rate is $110k. A property investor could then rock up and demand to buy it for $100k and immediately flip it for 10% profit and then move on to the next target. This inevitable consequence is that people would be forced to "value" their house at the maximum they think it might be worth in 12 months time or risk losing their home, or even higher to signal that they really don't want to leave their home, all the while paying more tax than they need to because the actual market price for houses would be lower. Of course, this might also force the purchase prices for housing to be forced higher, so stopping people getting on the property market. All in all, it sounds like a terrible system for most people.

deleted 3y ago
[deleted]
_nalply 3y ago
Offer a loop-hole? If someone went as far as putting the money in an escrow account to buy out your asset, you could retroactively increase the declared value. This of course has a price: You need to retroactively pay the tax for a few years and a surcharge for the expenses of your buyer. This could be repeated, similar to an auction.
mschuster91 3y ago
Homes where one lives in are usually exempt from a lot of taxes in many jurisdictions of the world. For rental properties, I'd love to see this happen, it would IMHO significantly drive down prices from the current overvaluation.

Jeff_Brown 3y ago

That seems bad, because you should hold an investment if and only if it is profitable. If anyone can take your investment from you as soon as they see it is profitable, you'll have no reason to invest.

thinkharderdev 3y ago
They can't take it from you because you can declare a higher value. You would have to pay more in taxes on it, but it should still be profitable. The whole point though (according the authors) was that if it were MORE profitable to someone else (because they had complimentary assets or some ability to use it in way that you can't) then it is better for that person to buy it and create more value from it. To take a completely contrived and unrealistic example, imagine that you owned a piece of land with some rare plant that can be turned into a cancer cure. This plant ONLY exists on your land. Obviously this land is extremely valuable to someone who can actually bring the cancer drug to market. You can of course refuse to sell the land (it is your land to do with as you want) but it seems sub-optimal for society for you to do so. Under this system you would either have to pay a really high tax or actually sell the land to someone who can make the cancer drug
- Jeff_Brown 3y ago
  You may have convinced me. I was going to respond, "What's to keep the price from rising until I am indifferent between having it and not having it?" But now I realize that would be fine -- I'm not made any worse off. That's a very weird idea but maybe it would work.

falserum 3y ago

Idea is very interesting and thought provoking way to get better appraisals, but it gives too much power to the single buyer over the owner. (E.g. One could force a competitor to incur either additional tax or cost of forced relocation)

takinola 3y ago

The patent troll problem can be solved industry-wide with the formation of a patent-troll legal defense fund. A bunch of companies put money into a fund. If any company (not just the contributors) is sued by a troll, they can apply to the fund to pay for legal assistance (applicable controls can include approval, fund limits, etc). If trolls see that companies are more likely to stand and fight, the cost of trolling goes up and the rewards become much less predictable. Hence, trolls will lose their ability to raise funding to purchase patents and have less troll-surface-area to act upon. This will lead to a vicious (virtuous?) cycle for the troll industry.

candiodari 3y ago
The patent troll problem IS solved by a patent-troll legal defense fund. This is exactly what the function of patent examiners is. They are supposed to try to invalidate patents before they have any chance to be applied in court. Of course, it's a government operation.

_lvbh 3y ago

Forcing the sale of property would be terrible for the poor

deleted 3y ago

[deleted]

FireBeyond 3y ago

On a much smaller level, some car races/events (the Gambler 500 - or offshoots, rather, the Gambler doesn't enforce) use a similar model for fairness. One of the competition rules is that you're only allowed to spend $500 on the vehicle. The way it is enforced is that you surrender a pink slip with your entry, and at the end of the event if someone else wants your vehicle for $500+, they can buy it.

mensetmanusman 3y ago

IP arbitrage would be really interesting then, as you could find applications of someone’s IP that they don’t even realize yet. Would love to test out the concept :)