5 ms·

We dealt with some patent trolls back in the 2010-2020 era, for those who have not experienced it, it is absurd. In our case, the patent "troll" was an LLC w/ ~

We dealt with some patent trolls back in the 2010-2020 era, for those who have not experienced it, it is absurd. In our case, the patent "troll" was an LLC w/ ~5 members - 2 lawyers, 1 person who owned the original patent, and some spouses. The only "asset" of the LLC was the patent. I think it was around scrollbars or some CSS overflow thing - they sent us a demand/cease-desist letter saying they will sue for $1M and asked for a call. Classic Lawyer call "well, we can make this all go away for $25k." We ended up fighting it a bit because of "principles" by our founder. - in discovery there was something like 1,000 of these exact demand letters they had sent. The kicker? If you fight back, it costs a ton in legal fees, and even if you win, you can’t recover those fees — because the LLC’s only asset is the patent itself. Just insane to me we would take a step back like this.

elevatedastalt 2y ago
Doesn't it cost a lot in legal fee to the troll too? How are they able to finance it given that they are basically a sham company?
- Someone1234 2y ago
  The troll is lawyers, so it only costs their own time.
  - mmooss 2y ago
    Their time is worth more than the $25K they want.
- ziddoap 2y ago
  It's like spam. Send out 1,000s of dubious demand letters which don't cost much. Some percent of those will settle with minimal effort on the troll's side. Profit. Drop the ones that look expensive and hope they don't counter sue.
  - HeatrayEnjoyer 2y ago
    What would they counter sue for?
    - ziddoap 2y ago
      I probably should have just written "counter" or "fight back". I was rushing out the office door when I pushed the reply button. In some countries you can sue for "unjustifiable threats to begin patent infringement proceedings", but I was also thinking things like filing complaints with the relevant Bar associations. That sort of thing.
- conartist6 2y ago
  Because they don't expect to win the lawsuit. Their odds of winning a lawsuit aren't that good, so their goal is to badger a founder into settling. A founder would likely be killing their creative endeavor to become their own lawyer and go to court for themselves, and the trolls choose targets for whom paying a lawyer for the length of one of these trials would be prohibitively costly. In other words, their real business model, the reason that they can be considered a "safe investment" is that they operate as an extortion racket at scale with the justice system itself as their (free) muscle.
  - whatshisface 2y ago
    How's this? 1. You buy "litigation insurance." 2. You state that you are insured on your website. 3. The insurance company is required to defend in all patent cases that arise, so there is no doubt that you will be represented in court. 4. Nobody sues. 5. The insurance company makes a profit with no cost or risk.
    - celestialcheese 2y ago
      Is this a real thing for small companies? I have no experience with this, and the only time I've gone and tried to get quoted for things like cyber liability, etc, the costs are incredible relative to the value of the business and revenues.
    - daemonologist 2y ago
      You can buy IP insurance; the problem is that the proposed strategy only works against patent trolls. If you infringed a legitimate patent the insurer would be screwed, so they'd want to do an enormous (impossible?) amount of due diligence before writing the policy. As with most other insurance policies, insurers in practice are only willing to take on a portion of the risk.
      - piker 2y ago
        Adverse selection would be a big issue, but actually perhaps if the indemnity only covers defense, an insurer would be willing to take more risk (and have expertise in batting away these claims.)
Teever 2y ago
The correct course of action in situations like this is to name and shame.
- rcxdude 2y ago
  How does that help? A patent troll doesn't really have any reputation to protect.
  - toasterlovin 2y ago
    Would the bar association in the lawyer’s state be interested?
    - unyttigfjelltol 2y ago
      Other than to commend the entrepreneurial sprit of its members?
    - sejje 2y ago
      Why, is it illegal? It's for sure scummy, but from what I've read about patent trolls, usually they get to continue until they eventually run into someone principled (and bankrolled) and then they lose their patent due to prior art in many cases. I've never heard of them getting in actual trouble.
  - Teever 2y ago
    If legal consequences aren't a possible avenue to prevent unacceptable behaviour from someone then a viable alternative is to make that person a pariah. The more people know that someone is doing unscrupulous things the more people can choose to not do business with that person or interact with them in a friendly matter. Ideally this would lead to a scenario where they lose the means to continue to do unacceptable things and they would be forced to stop.
    - antasvara 2y ago
      The point here is that a patent troll isn't really a "business." There would be no real reason to work with the patent troll outside of the extortion they're using the patent for. Given the options for engagement are "settle or be sued," a friendly approach was never really an option. Given these parameters, how would making them a pariah change the functioning of the business?
lofaszvanitt 2y ago
How come you can sue others and the court doesn't check whether you have the funds if you lose? I mean if you don't have funds allocated away in case you lose, then why start the proceedings?
- ddtaylor 2y ago
  Because solving the answer to what is the correct legal interpretation is not concerned with if that interpretation yields economic identities.
- adgjlsfhk1 2y ago
  Because it's generally considered bad policy to make it illegal for poor people to sue.
  - lofaszvanitt 2y ago
    Yeah, that's trivial. But law has so many edge cases and seemingly it always favor either powerful or wealthy individuals. Plus, poor people cannot afford the litigation costs...
    - fernmyth 2y ago
      [Written laws] were just like spiders' webs; they would hold the weak and delicate... but would be torn to pieces by the rich and powerful - Plutarch
    - zdragnar 2y ago
      > seemingly it always favor either powerful or wealthy individuals Reality is in favor of the powerful and wealthy. It's practically a tautological statement that powerful people are more powerful than those who are not. Poor people do have the option of seeking pro bono, contingency (lawyers paid from winnings or settlements), or other means, but they will still not have things like daycare / nanny for children, free time (still need to work to pay bills while trial is pending), prepared meals, staff to handle shopping / laundry / cleaning, or a billion other things that make the stress of going through the court system easier to bear. You could probably say goodbye to pro bono or contingency work if you also had to prove you have the money to pay legal fees before you could go to court.
gist 2y ago
I think like so many things the idea of 'patent trolls' has taken on a meaning whereby anyone who has a patent but no operating actual company (as you are describing LLC with 5 members and a lawyer) everyone automatically thinks 'sham'. On the surface by stories related that certainly appears to be the case. However we don't have any data (only anecdotes) on how many patents are pursued this way that are actually valid. And 'back in the old days' it used to be that you could have an actual patent and then get shafted by some large corporation simply because they could afford lawyers and you couldn't (meaning 'mr small inventor') What I am saying in no way means I don't think there is probably abuse (there are enough anecdotes to think 'something is wrong here') but really we need the entire picture and dataset to decide that (in all fairness).
- karaterobot 2y ago
  It's not really a question of whether the patent troll has a legitimate patent or not—in the sense of having clear ownership over the IP, that is. They generally do. We consider someone a patent troll when they don't make use of the patent themselves, except to extract money from other people, typically through threats of legal action. They're exploiting the fear of being sued for a lot of money in order to get a comparatively small amount of money in exchange for agreeing to not sue. "Troll" here is in the pre-internet sense of the word, not someone making up a fake story on a message board, but more like a troll living under a bridge, demanding money from people in order to cross it.
  - ted_dunning 2y ago
    Trolls often have clear title to a patent that covers something. Many of these patents should not have been granted, but they were. If you fight them to the end, you can often get the patent invalidated, but the trolls are smart enough to settle before that happens. But they generally don't have a patent that covers anything real. Even ignoring the situations where the patent is indefensible through defects in process or due to prior art, the claims in these patents often don't actually read against the businesses being sued. The problem is that it takes tens of thousands of dollars per patent to get an opinion from your own lawyers about whether the patents bear on your products or processes and you pretty much have to do that even if you never go to court.
gist 2y ago
> We ended up fighting it a bit because of "principles" by our founder. - in discovery there was something like 1,000 of these exact demand letters they had sent. I am noting you have not said how this ended up. What does 'we ended up fighting it a bit because of "principles" of our founder.
- ddtaylor 2y ago
  It means they pushed back then settled without any useful resolution. The troll didn't get a big payday, but they didn't get told to stop and it set precedent helping them shake down others.
dctoedt 2y ago
See Blue Jeans Cable's classic response to a patent cease-and-desist letter from Monster Cables: The Blue Jeans Cable CEO was a former litigator who pulled no punches in his response. [0] [0] See https://www.oncontracts.com/monster-cables-picked-the-wrong-guy-to-threaten/ https://www.oncontracts.com/monster-cables-picked-the-wrong-... (self-cite).
- jnsie 2y ago
  > Not only am I unintimidated by litigation; I sometimes rather miss it. Sumptuous!
  - dkh 2y ago
    I get an adrenaline rush just reading it
    - phendrenad2 2y ago
      Patrick... you're sweating
  - FireBeyond 2y ago
    The original (https://www.bluejeanscable.com/legal/mcp/response041408.pdf https://www.bluejeanscable.com/legal/mcp/response041408.pdf) has so much more. It is truly a work of art: > RE: Your letter, received April Fools' Day > Let me begin by stating, without equivocation, that I have no interest in infringing upon any intellectual property belonging to Monster Cable. Indeed, the less my customers think my products resemble Monster's, in form or function, the better. > Similarly, as I note further below, you omit reference to another patent Monster has held which appears, frankly to be fatal to your position. If you expect to persuade me, you had better start making full, open and honest disclosures > It looks like when you sent this letter, you were operating on the premise that I am not smart enough to see through your deceptions or sophisticated enough to intelligently evaluate your claims; shame on you. > You are welcome to point out any errors in my reasoning; but I have to say that I will be unreservedly surprised if you are successful in doing so. > It may be that my inability to see the pragmatic value of settling frivolous claims is a deep character flaw
atkailash 2y ago
[dead]
chrisweekly 2y ago
I just enjoyed another story about fighting similar legal shenanigans higher up on the HN front page - https://news.ycombinator.com/item?id=43442178 https://news.ycombinator.com/item?id=43442178

elevatedastalt 2y ago

Doesn't it cost a lot in legal fee to the troll too? How are they able to finance it given that they are basically a sham company?

Someone1234 2y ago
The troll is lawyers, so it only costs their own time.
- mmooss 2y ago
  Their time is worth more than the $25K they want.
ziddoap 2y ago
It's like spam. Send out 1,000s of dubious demand letters which don't cost much. Some percent of those will settle with minimal effort on the troll's side. Profit. Drop the ones that look expensive and hope they don't counter sue.
- HeatrayEnjoyer 2y ago
  What would they counter sue for?
  - ziddoap 2y ago
    I probably should have just written "counter" or "fight back". I was rushing out the office door when I pushed the reply button. In some countries you can sue for "unjustifiable threats to begin patent infringement proceedings", but I was also thinking things like filing complaints with the relevant Bar associations. That sort of thing.
conartist6 2y ago
Because they don't expect to win the lawsuit. Their odds of winning a lawsuit aren't that good, so their goal is to badger a founder into settling. A founder would likely be killing their creative endeavor to become their own lawyer and go to court for themselves, and the trolls choose targets for whom paying a lawyer for the length of one of these trials would be prohibitively costly. In other words, their real business model, the reason that they can be considered a "safe investment" is that they operate as an extortion racket at scale with the justice system itself as their (free) muscle.
- whatshisface 2y ago
  How's this? 1. You buy "litigation insurance." 2. You state that you are insured on your website. 3. The insurance company is required to defend in all patent cases that arise, so there is no doubt that you will be represented in court. 4. Nobody sues. 5. The insurance company makes a profit with no cost or risk.
  - celestialcheese 2y ago
    Is this a real thing for small companies? I have no experience with this, and the only time I've gone and tried to get quoted for things like cyber liability, etc, the costs are incredible relative to the value of the business and revenues.
  - daemonologist 2y ago
    You can buy IP insurance; the problem is that the proposed strategy only works against patent trolls. If you infringed a legitimate patent the insurer would be screwed, so they'd want to do an enormous (impossible?) amount of due diligence before writing the policy. As with most other insurance policies, insurers in practice are only willing to take on a portion of the risk.
    - piker 2y ago
      Adverse selection would be a big issue, but actually perhaps if the indemnity only covers defense, an insurer would be willing to take more risk (and have expertise in batting away these claims.)

Teever 2y ago

The correct course of action in situations like this is to name and shame.

rcxdude 2y ago
How does that help? A patent troll doesn't really have any reputation to protect.
- toasterlovin 2y ago
  Would the bar association in the lawyer’s state be interested?
  - unyttigfjelltol 2y ago
    Other than to commend the entrepreneurial sprit of its members?
  - sejje 2y ago
    Why, is it illegal? It's for sure scummy, but from what I've read about patent trolls, usually they get to continue until they eventually run into someone principled (and bankrolled) and then they lose their patent due to prior art in many cases. I've never heard of them getting in actual trouble.
- Teever 2y ago
  If legal consequences aren't a possible avenue to prevent unacceptable behaviour from someone then a viable alternative is to make that person a pariah. The more people know that someone is doing unscrupulous things the more people can choose to not do business with that person or interact with them in a friendly matter. Ideally this would lead to a scenario where they lose the means to continue to do unacceptable things and they would be forced to stop.
  - antasvara 2y ago
    The point here is that a patent troll isn't really a "business." There would be no real reason to work with the patent troll outside of the extortion they're using the patent for. Given the options for engagement are "settle or be sued," a friendly approach was never really an option. Given these parameters, how would making them a pariah change the functioning of the business?

lofaszvanitt 2y ago

How come you can sue others and the court doesn't check whether you have the funds if you lose? I mean if you don't have funds allocated away in case you lose, then why start the proceedings?

ddtaylor 2y ago
Because solving the answer to what is the correct legal interpretation is not concerned with if that interpretation yields economic identities.
adgjlsfhk1 2y ago
Because it's generally considered bad policy to make it illegal for poor people to sue.
- lofaszvanitt 2y ago
  Yeah, that's trivial. But law has so many edge cases and seemingly it always favor either powerful or wealthy individuals. Plus, poor people cannot afford the litigation costs...
  - fernmyth 2y ago
    [Written laws] were just like spiders' webs; they would hold the weak and delicate... but would be torn to pieces by the rich and powerful - Plutarch
  - zdragnar 2y ago
    > seemingly it always favor either powerful or wealthy individuals Reality is in favor of the powerful and wealthy. It's practically a tautological statement that powerful people are more powerful than those who are not. Poor people do have the option of seeking pro bono, contingency (lawyers paid from winnings or settlements), or other means, but they will still not have things like daycare / nanny for children, free time (still need to work to pay bills while trial is pending), prepared meals, staff to handle shopping / laundry / cleaning, or a billion other things that make the stress of going through the court system easier to bear. You could probably say goodbye to pro bono or contingency work if you also had to prove you have the money to pay legal fees before you could go to court.

gist 2y ago

I think like so many things the idea of 'patent trolls' has taken on a meaning whereby anyone who has a patent but no operating actual company (as you are describing LLC with 5 members and a lawyer) everyone automatically thinks 'sham'. On the surface by stories related that certainly appears to be the case. However we don't have any data (only anecdotes) on how many patents are pursued this way that are actually valid. And 'back in the old days' it used to be that you could have an actual patent and then get shafted by some large corporation simply because they could afford lawyers and you couldn't (meaning 'mr small inventor') What I am saying in no way means I don't think there is probably abuse (there are enough anecdotes to think 'something is wrong here') but really we need the entire picture and dataset to decide that (in all fairness).

karaterobot 2y ago
It's not really a question of whether the patent troll has a legitimate patent or not—in the sense of having clear ownership over the IP, that is. They generally do. We consider someone a patent troll when they don't make use of the patent themselves, except to extract money from other people, typically through threats of legal action. They're exploiting the fear of being sued for a lot of money in order to get a comparatively small amount of money in exchange for agreeing to not sue. "Troll" here is in the pre-internet sense of the word, not someone making up a fake story on a message board, but more like a troll living under a bridge, demanding money from people in order to cross it.
- ted_dunning 2y ago
  Trolls often have clear title to a patent that covers something. Many of these patents should not have been granted, but they were. If you fight them to the end, you can often get the patent invalidated, but the trolls are smart enough to settle before that happens. But they generally don't have a patent that covers anything real. Even ignoring the situations where the patent is indefensible through defects in process or due to prior art, the claims in these patents often don't actually read against the businesses being sued. The problem is that it takes tens of thousands of dollars per patent to get an opinion from your own lawyers about whether the patents bear on your products or processes and you pretty much have to do that even if you never go to court.

gist 2y ago

> We ended up fighting it a bit because of "principles" by our founder. - in discovery there was something like 1,000 of these exact demand letters they had sent. I am noting you have not said how this ended up. What does 'we ended up fighting it a bit because of "principles" of our founder.

ddtaylor 2y ago
It means they pushed back then settled without any useful resolution. The troll didn't get a big payday, but they didn't get told to stop and it set precedent helping them shake down others.

dctoedt 2y ago

See Blue Jeans Cable's classic response to a patent cease-and-desist letter from Monster Cables: The Blue Jeans Cable CEO was a former litigator who pulled no punches in his response. [0] [0] See https://www.oncontracts.com/monster-cables-picked-the-wrong-guy-to-threaten/ https://www.oncontracts.com/monster-cables-picked-the-wrong-... (self-cite).

jnsie 2y ago
> Not only am I unintimidated by litigation; I sometimes rather miss it. Sumptuous!
- dkh 2y ago
  I get an adrenaline rush just reading it
  - phendrenad2 2y ago
    Patrick... you're sweating
- FireBeyond 2y ago
  The original (https://www.bluejeanscable.com/legal/mcp/response041408.pdf https://www.bluejeanscable.com/legal/mcp/response041408.pdf) has so much more. It is truly a work of art: > RE: Your letter, received April Fools' Day > Let me begin by stating, without equivocation, that I have no interest in infringing upon any intellectual property belonging to Monster Cable. Indeed, the less my customers think my products resemble Monster's, in form or function, the better. > Similarly, as I note further below, you omit reference to another patent Monster has held which appears, frankly to be fatal to your position. If you expect to persuade me, you had better start making full, open and honest disclosures > It looks like when you sent this letter, you were operating on the premise that I am not smart enough to see through your deceptions or sophisticated enough to intelligently evaluate your claims; shame on you. > You are welcome to point out any errors in my reasoning; but I have to say that I will be unreservedly surprised if you are successful in doing so. > It may be that my inability to see the pragmatic value of settling frivolous claims is a deep character flaw

atkailash 2y ago

[dead]

chrisweekly 2y ago

I just enjoyed another story about fighting similar legal shenanigans higher up on the HN front page - https://news.ycombinator.com/item?id=43442178 https://news.ycombinator.com/item?id=43442178