The penalties for wrongful copyright assertion should be much more severe than they are today.
This is the system in other places (eg. Germany) and greatly prevents legal bullying
Companies can still calculate the costs of losing the case and come to the conclusion that the benefit of the intimidation alone is worth it.
I think we sorta want more proactive and aggressive state attorneys that will prosecute seen injustices for the public good. I've pondered this a lot and I can't really see any obvious other path that doesn't have even worse potential consequences.
Make both parties start in non-binding arbitration, where the plaintiff pays.
If either party chooses to escalate, they'll be on the hook for all the fees, including the original arbitration, if they loose.
Plaintiffs could purchase insurance or some other vehicle to de-risk their claims if they believe, but aren't certain, that they'll win. This will help smaller parties that get infringed upon.
Could this be solved if we moved towards more % based monetary penalties?
More fundamentally, the purpose of such measures is explicitly to discourage the bringing of suits - anything big enough to be a viable deterrent to bad faith actors will inevitably also be big enough to deter good faith actors.
The law of the law be a complicated and harsh mistress.
Anyways, less extreme would be that we could go back to reasonable copyright terms as existed a hundred years ago. It seems likely at this point that our current 'experiment' with extreme copyright enforcement is going to produce an entire 100+ year range where the only works that will survive will be those owned by massive corporations who hold perpetual ownership of the work instead of their actual creators.
The fact is society is doing them a huge favor by pretending their works are scarce. In return they abuse our good will and erode our public domain rights. All we have to do is stop pretending. Start treating everything as public domain. That ought to be enough of a reality check to an industry that thinks it can monopolize numbers for hundreds of years.
Nobody cares how much money they spent to make stuff either. They don't get to deny reality just because they spent money.
Yes, it means no more Disney movies or AAA games. I'm personally quite ok with that.
[0] This is largely for the sake of argument, although I do definitely lean this direction.
There's nothing wrong with protecting trade secrets, etc. but that is the onus of the secret holder to employ proper security measures. If someone assaults those measures, you prosecute them for those specific assaults (physical, cyber, etc).
But you don't prosecute people merely for being in possession or distributing "intellectual property" i.e. ideas and symbols. Only a backwards society would allow that.
If people don't have to sell their creative work for profit to live, you don't need copyright.