5 ms·

Does anyone sell patent-troll insurance?

Guvante 13y ago
Too easy to game. With the minimum legal cost of a successful defense being $200,000, what kind of monthly rate would cover that?
- larrys 13y ago
  You will see this happen I'm sure. Insurance companies don't sweat big lawsuits and have all the resources to put up a fight and spread the risk. It's only a matter of them viewing it as an opportunity. It will happen. And they will be able to effectively (at scale) jerk around the trolls till the cows come home. The trolls will either settle for a nominal amount (think of it as a protection racket) or pick a different house to break into without an alarm.
- dscb 13y ago
  With car insurance claims easily being >100k due to injuries/death/multiple vehicle collisions, what kind of monthly rate could possible cover that? Other examples with high claim amounts, flood insurance, health care, etc. It doesn't matter how high the minimum cost is, and you cant judge any kind of insurance based solely on that. The chance of it happening is just as important. Let's say 1% of all companies get sued for patent disputes every year (I don't know the stats on this, just an example), with an average defense costing $500 000. The insurance company also wants to make money, so let's have them charge 150% over cost. $500k x 1.5 = $750k (amount of revenue per 100 customers) $750k x 0.01= $7500 (cost per customer per year) $7500 / 12 = $625 (cost per customer per month) Now even that number isn't that high, and I assume 1% of companies getting hit with patent lawsuit per year is bigger than the real figures.
  - Guvante 13y ago
    Average cost of a claim and average claims per year are incredibly important. Average cost of a car claim (ignoring glass) is probably in the $5,000 range. The average person gets in <0.5 accidents a year, so coverage is <$2,500 for the average person. Average cost of a patent claim is, say $200,000 (that is a minimum, but we will treat it as an average). Average company gets 0.05 patent claims per year (1 in 20). Coverage would be $1,000 a month. Not too bad. Now lets add what happens after the first time you pay out an insurance claim within 6 months. Someone in your company gets $200,000 for a client list, your patent claims per year just became 10 per client. Good luck.
- wavesounds 13y ago
  Seeing that all startups are essential equally likely to be sued with all the bad patens that are out there, by simply having an army of attorneys behind you it seems you could significantly reduce your risk. Therefore simply by paying for insurance your significantly reduce the likelihood that that insurance will be needed.
- mr_luc 13y ago
  Google, Twitter, Yahoo and Facebook need to make this insurance happen. They all want to help erase software patent abuse anyway, right? Are they serious about it? If so, they could put together this insurance at reasonable/subsidized rates for startups, and immediately get the opportunity to fight 90%+ of all patent troll cases relevant to their interests.
  - OGC 13y ago
    Google, Twitter, Yahoo and Facebook all hold patents which will make you go "wat. that is patentable?". They aren't nice guys. And all of them (except for yahoo) are holding de-facto monopolies.
    - mr_luc 13y ago
      Every large tech company wants a patent portfolio, as a defensive moat. But the companies I mentioned don't actively engage in shakedowns, as far as I know; I left Microsoft off of that list because of its poorly disguised attempts to destroy Linux through patent trolling, and Apple because of the Samsung case, and Oracle because of the Java case, and Amazon because of one-click ... In contrast, I don't see something like this necessarily being against the best interests or modus operandi of the companies I mentioned. I can see it being unpractical, unlikely or unattainable for a variety of reasons, but those companies have de-facto monopolies, not state-granted monopolies (patents), and that they seem to prefer to operate in a world where you're allowed to innovate.

Too easy to game. With the minimum legal cost of a successful defense being $200,000, what kind of monthly rate would cover that?

larrys 13y ago
You will see this happen I'm sure. Insurance companies don't sweat big lawsuits and have all the resources to put up a fight and spread the risk. It's only a matter of them viewing it as an opportunity. It will happen. And they will be able to effectively (at scale) jerk around the trolls till the cows come home. The trolls will either settle for a nominal amount (think of it as a protection racket) or pick a different house to break into without an alarm.
dscb 13y ago
With car insurance claims easily being >100k due to injuries/death/multiple vehicle collisions, what kind of monthly rate could possible cover that? Other examples with high claim amounts, flood insurance, health care, etc. It doesn't matter how high the minimum cost is, and you cant judge any kind of insurance based solely on that. The chance of it happening is just as important. Let's say 1% of all companies get sued for patent disputes every year (I don't know the stats on this, just an example), with an average defense costing $500 000. The insurance company also wants to make money, so let's have them charge 150% over cost. $500k x 1.5 = $750k (amount of revenue per 100 customers) $750k x 0.01= $7500 (cost per customer per year) $7500 / 12 = $625 (cost per customer per month) Now even that number isn't that high, and I assume 1% of companies getting hit with patent lawsuit per year is bigger than the real figures.
- Guvante 13y ago
  Average cost of a claim and average claims per year are incredibly important. Average cost of a car claim (ignoring glass) is probably in the $5,000 range. The average person gets in <0.5 accidents a year, so coverage is <$2,500 for the average person. Average cost of a patent claim is, say $200,000 (that is a minimum, but we will treat it as an average). Average company gets 0.05 patent claims per year (1 in 20). Coverage would be $1,000 a month. Not too bad. Now lets add what happens after the first time you pay out an insurance claim within 6 months. Someone in your company gets $200,000 for a client list, your patent claims per year just became 10 per client. Good luck.
wavesounds 13y ago
Seeing that all startups are essential equally likely to be sued with all the bad patens that are out there, by simply having an army of attorneys behind you it seems you could significantly reduce your risk. Therefore simply by paying for insurance your significantly reduce the likelihood that that insurance will be needed.
mr_luc 13y ago
Google, Twitter, Yahoo and Facebook need to make this insurance happen. They all want to help erase software patent abuse anyway, right? Are they serious about it? If so, they could put together this insurance at reasonable/subsidized rates for startups, and immediately get the opportunity to fight 90%+ of all patent troll cases relevant to their interests.
- OGC 13y ago
  Google, Twitter, Yahoo and Facebook all hold patents which will make you go "wat. that is patentable?". They aren't nice guys. And all of them (except for yahoo) are holding de-facto monopolies.
  - mr_luc 13y ago
    Every large tech company wants a patent portfolio, as a defensive moat. But the companies I mentioned don't actively engage in shakedowns, as far as I know; I left Microsoft off of that list because of its poorly disguised attempts to destroy Linux through patent trolling, and Apple because of the Samsung case, and Oracle because of the Java case, and Amazon because of one-click ... In contrast, I don't see something like this necessarily being against the best interests or modus operandi of the companies I mentioned. I can see it being unpractical, unlikely or unattainable for a variety of reasons, but those companies have de-facto monopolies, not state-granted monopolies (patents), and that they seem to prefer to operate in a world where you're allowed to innovate.