Trolling patent trolls: A proposal

I was reading Jason Freedman’s latest blog post the other day about how to handle patent trolls (he was calling for patent troll insurance.)

I should probably start this off with a blatant DISCLAIMER: I am NOT and attorney and this does NOT constitute legal advice, this is simply my out of the box thinking on a way to game the patent trolls current system. I’ve spent a fair amount of time around court rooms and understand enough about business to be dangerous.

This post started off as what I thought would be a comment on Hacker News but since I was in Big Sur for the weekend my phone would not let me post it and I spent the weekend thinking about this particular subject along with some of my own thoughts for my latest startup.

Here’s what I think more technology companies should consider doing in order to effectively “troll” the patent trolls.

There are some simple, but intricate tactics several companies I know of use for things ranging from being afraid of lawsuits to avoiding taxes and I think they would be well suited for patent trolls as well.

Have several corporate structures

To avoid over complicating what I mean I’ll break it down one by one.

  1. Have the Deleware C-Corp that serves as the company that your investors put their money into and you run as the heart of your business just as you typically would.

  2. Create a separate company or companies (LLC’s for reasons I’ll describe later) which leases technology to your C-corp for some fee (probably very small, for purposes of this argument, let’s call it a dollar a month)

When a patent trolls issues a C&D to your C-corp just kindly inform them that you lease the technology from said LLC.

When said LLC is issued a C&D you have some choices to make

  1. Take a look at their probably very ridiculous licensing fee and see if there’s a way to “game” it by only paying for one license, since after all, you only license the tech to one user(your C-Corp).

  2. Don’t retain counsel, show up to court or don’t and let them rule however the judge chooses to do so. If the judge awards damages too unreasonable to pay simply let the LLC become insolvent.

Rinse and Repeat

While this is undoubtedly a huge pain, it could be significantly more painful for Patent trolls if enough people chose this route or a similar one, perhaps with some more sound legal advice ;)

What’s your idea for fighting patent trolls?

Discussion on Hacker News


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