4 ms·

Absent meaningful patent reform (don't hold your breath on that one), what might be needed here is for some enterprising patent lawyers to band together and for

by arbuge 14y ago

Absent meaningful patent reform (don't hold your breath on that one), what might be needed here is for some enterprising patent lawyers to band together and form a troll insurance company offering protection against these scammers. Somewhat like malpractice insurance for doctors, although the analogy is not precise - the malefactors would be the plaintiffs in these cases, not the defendants.

DannyBee 14y ago
I'm confused how this would be effective. 1. Insurance works because the risk of X happening to individuals in a group of insured people is low individually, even if over the entire population it isn't. This ensures the number of actual payouts are low. Here, the risk of troll lawsuits happening to all insured companies is high. Thus, you'd have to pay out to almost everyone. 2. Insurance also only works (for the insurer, anyway) if the premiums cover the payouts. Given the typical award is tens of millions or hundreds of millions, you'd need both lots of companies, and very high premiums. To cover a single $100 million award, you'd need 10k companies to pay 10k each in premiums. If 100 million gets awarded against each of 5 companies in the lawsuit, now it's 50k premium per 10k companies. ISTM it quickly becomes infeasible as long as damages are so high. Note: General types of lawsuit insurance are already available, but they exclude patent infringement. Patent infringement/litigation insurance is also already available, but it's expensive as hell, per the above.
- arbuge 14y ago
  Although certainly crippling to a startup, damages are usually not that high in absolute terms unless it's the likes of Samsung being sued. If memory serves me right, according to a recent article on HN, they're on the order of ~$1m for small-medium businesses and $7m for larger businesses.

4 ms·

Absent meaningful patent reform (don't hold your breath on that one), what might be needed here is for some enterprising patent lawyers to band together and for

by arbuge 14y ago

DannyBee 14y ago
I'm confused how this would be effective. 1. Insurance works because the risk of X happening to individuals in a group of insured people is low individually, even if over the entire population it isn't. This ensures the number of actual payouts are low. Here, the risk of troll lawsuits happening to all insured companies is high. Thus, you'd have to pay out to almost everyone. 2. Insurance also only works (for the insurer, anyway) if the premiums cover the payouts. Given the typical award is tens of millions or hundreds of millions, you'd need both lots of companies, and very high premiums. To cover a single $100 million award, you'd need 10k companies to pay 10k each in premiums. If 100 million gets awarded against each of 5 companies in the lawsuit, now it's 50k premium per 10k companies. ISTM it quickly becomes infeasible as long as damages are so high. Note: General types of lawsuit insurance are already available, but they exclude patent infringement. Patent infringement/litigation insurance is also already available, but it's expensive as hell, per the above.
- arbuge 14y ago
  Although certainly crippling to a startup, damages are usually not that high in absolute terms unless it's the likes of Samsung being sued. If memory serves me right, according to a recent article on HN, they're on the order of ~$1m for small-medium businesses and $7m for larger businesses.