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The company may be able to collect ownership of the patent from the shell company as payment to cover the legal fees. This means that a troll would lose the s

The company may be able to collect ownership of the patent from the shell company as payment to cover the legal fees. This means that a troll would lose the set of patents every time they lost a case. Unless they were willing to outbid the winning party to recover the patents from the shell, in which case the winning party would recover their legal fees. So it's not pointless. It does increase risk for trolls. Although I do agree that much larger reform would be better. And requiring the posting of a bond is a fantastic idea.

rwmj 14y ago
Unfortunately this just moves the nuclear weapons around. We really need disarmament.
Tyrannosaurs 14y ago
Not necessarily. Some of the companies are structured such that they don't own the patent, just certain rights to it. Basically they sue on behalf of someone else which both reduces the risk and also allows the patent owner to claim that they're not the one behind the suit. I'd imagine that those rights would just be tied up so they weren't transferable (so if the company did go under they would no longer be an asset) and that this structure would become the norm. What you'd need to do is have the suing company stump up the money in advance into some sort of escrow account (or some other mechanism for proving they can pay).
- obtu 14y ago
  Shouldn't this loophole be closed? Something like: only allow the exclusive owner of a patent to sue potential infringers. That isn't enough to make shell companies a losing proposition, though, because they still contain the risk of losing a suit. I prefer the bond idea, it is a simple and more direct route to making NPEs liable for their actions.
  - Tyrannosaurs 14y ago
    Something along those lines might be an improvement but then you have the issue of a parent company in the US not being able to assign those rights to a European based subsidiary to defend them there. I think it's probably dealing with the wrong problem which is the need for more fundamental reform of IP law.
- TimJRobinson 14y ago
  I'm quite sure they thought of this and will address it in some way.
roc 14y ago
> "The company may be able to collect ownership of the patent from the shell company as payment to cover the legal fees." The patent that, by definition, was just invalidated or neutered in the defendants victory? Why would the trolls care about that?

rwmj 14y ago

Unfortunately this just moves the nuclear weapons around. We really need disarmament.

Tyrannosaurs 14y ago

Not necessarily. Some of the companies are structured such that they don't own the patent, just certain rights to it. Basically they sue on behalf of someone else which both reduces the risk and also allows the patent owner to claim that they're not the one behind the suit. I'd imagine that those rights would just be tied up so they weren't transferable (so if the company did go under they would no longer be an asset) and that this structure would become the norm. What you'd need to do is have the suing company stump up the money in advance into some sort of escrow account (or some other mechanism for proving they can pay).

obtu 14y ago
Shouldn't this loophole be closed? Something like: only allow the exclusive owner of a patent to sue potential infringers. That isn't enough to make shell companies a losing proposition, though, because they still contain the risk of losing a suit. I prefer the bond idea, it is a simple and more direct route to making NPEs liable for their actions.
- Tyrannosaurs 14y ago
  Something along those lines might be an improvement but then you have the issue of a parent company in the US not being able to assign those rights to a European based subsidiary to defend them there. I think it's probably dealing with the wrong problem which is the need for more fundamental reform of IP law.
TimJRobinson 14y ago
I'm quite sure they thought of this and will address it in some way.

roc 14y ago

> "The company may be able to collect ownership of the patent from the shell company as payment to cover the legal fees." The patent that, by definition, was just invalidated or neutered in the defendants victory? Why would the trolls care about that?