Assuming you need a legal staff of 20 with avg cost 500k per. So that’s 10 million per year. Double it for rent, SGA, etc. we’re at 20 million per year.
Offer a protection package at 10k per year, you need 2000 paying customers. Since all the lawyers are on staff, you can have them invalidating patents when not defending case. If you structure it like a mutual insurance company, you could return a portion of premium based on expenses once a war chest is amassed.
Is this something I could take to y-combinator?
And obviously they would pitch it internally to all existing + future startups.
Maybe this is what ends this garbage once and for all?
Time to start building a neural net to invalidate patent trolls.
Content is always super valuable for companies with a social good angle.
This is the kind of service you'd want provided by somebody "too big to fail".
They can afford it. They might attract all the best startups as a result, if those feel better protected.
Wouldn't this be in all venture capitalists self interest? (Not only YC) Maybe they could join (or start their own)
One of the big constraints of insurance companies is the differing laws in each state and province, so don't underestimate the corporate/legal/tax/accounting/operational/compliance reporting/etc costs in EACH jurisdiction.
Reading down the Twitter feed from the troll in question shows a Tweet of a discovery by them and their lawyer that it's cheaper to deal with the court costs of trafficking 15 kg of cocaine than to legally assert a patent.
This of course can be read two ways like what a shame because it's a sin to use cocaine and not a sin to legally assert your intellectual property rights, however in context, it's so much more sinister scenario of shaking down legitimate businesses for illegitimate reasons.
Go do it, you seem to have a good plan that seems feasible, there must be some people with capitol willing to hop on board.
A new insurance we never even knew we needed.
Smaller game studios ask bigger companies, like Nintendo, to register some patents in their stead so the bigger companies can keep them safe with their elite team of lawyers. The bigger companies like Nintendo in turn gatekeep the patents from trolls and abusers, letting the industry at-large use the patents for a greater good while suing anyone who doesn't play nice into oblivion.
It's not perfect, and it certainly only works because businesses in Japanese society generally view each other as friendly rivals rather than outright enemies, but it's an ingenius solution to a legitimate social problem.
Exercise to the reader as to whether the EU, US or Japanese model is most effective.
https://www.fourmilab.ch/autofile/www/chapter2_105.html
I think the problem is that most of the major companies are comfortable writing it off as a cost of doing business and don’t want to give up the possibility of using strategic patent suits themselves.
This is a highly under-appreciated aspect of the patent world. Companies that buy and own lots of patents do so defensively. Big companies even enter into patent cross-licensing agreements with each other, where they basically say "I know you probably infringe on my patents and I probably infringe on yours, but we'll make a deal and indemnify each other". But they want to maintain those patents to harass upstart companies that would threaten their core business, so when the trolls come along, they just pay to license and move on.
One of the few examples of a big company fighting patent trolls is Intuit vs encryption patent trolls, of all things. https://arstechnica.com/tech-policy/2014/06/intuit-beats-web...
I'd rather see the Cloudflare approach, beat the barbarians back from the gates then destroy the troll's IP inventory with examples of prior art.
This sounds like ransomware insurance. Often you would expect the insurance to help you recover from losses but instead they just pay the ransoms since it's cheaper. Which in-turn makes the insurance holders even more of a juicy target.
One example: https://patents.stackexchange.com/questions/3566/scaling-bas...
Of course, none of that helps with patent trolls, just like the ability to turn Russia to radioactive glass doesn't defend Washington DC from an independent actor with a suitcase nuke.
Litigation is notoriously risky; the cost of settling is usually orders of magnitude less than the gain of winning. In that respect, it resembles the kind of thing insurers specialize in. So this is simply a specialist insurer, whose USP is that if they think they can invalidate a patent, they go for it.
I'd have thought that deterring patent trolls is the opposite of what they ought to do; I imagine something more like a honeypot operation - every effort is taken to ensure members look just like ordinary marks and suckers.
It could cause strains if someone came after a member with a valid patent. The club would decline their claim, they'd have to settle and redesign their product, and they might go bust.
LOT Network - https://lotnet.com/
"Patent Trolls and You: EFF Virtual Boot Camp for App Developers" - https://youtu.be/X6eaDSd54_c
Intellectual Ventures started out that way but quickly went on offense.
A quick search turned up https://lotnet.com/ which I think is it
Rpx is probably the closest thing. They will try to kill a patent if it is being used against their members. But they don’t cover the cost of litigation.
There are also patent pools where everyone pools their money to buy a certain patent.
There may be some insurance you can seek out. But I don’t know if anyone in the space that is using that type of thing
Edit: on the other hand your potential customers will be difficult to convince. To pay insurance you must have risk aversion, something I don't expect to be abundant among startups
In the case of healthcare and education, I believe that cost disease is caused partially by an excess of funding - subsidizing. In the case of healthcare, it's insurance. In the case of education, it's grants and student loans. These mechanics greatly reduce the pressure of service-providers to reduce prices - and so they increase prices because they want profit.
If legal fees, which are high enough as it is, were also subject to subsidization through this kind of organization, then even though members would be temporarily better-off, I would expect that as more people made use of these organizations, legal fees would start to rise even more - a tragedy of the commons.
Besides, aren't these lawsuits symptoms of a problem? We want to address the disease (overly complex legal system requiring an expensive education to understand, mechanics that allow for patent trolls), not the symptoms.
[1] https://slatestarcodex.com/2017/02/09/considerations-on-cost...
Member organisations would be trying to get the anti-patent-troll org to defend any and all IP claims against them. Not all IP claims are patent trolling, some are legitimate and you don't want there to be big arguments whether this is a troll attack that needs defending.
Perhaps the way to do it is by the type of claimant rather than any analysis of the merits of the case. For example, one standard would be "Anyone who brings a claim while not actually being a competitor of the defendant".
Insurance schemes pool the insureds' moneys together in case something bad happens to one of the insureds, of course it'd be in all the insureds' best interest that the money is used properly, if the company says "We won't fight this particular patent troll", it's also in the pool's interest to tell the company "Wait, we think this is a valid case, and you have to fight it!", because otherwise, when a similar patent troll shows up trolling one of them, the insurance company will also ignore it, leaving them exposed.
> Insurance agreements are legally binding contracts and that's why they get litigated over. Your scheme essentially waives an insured's right to a breach of contract claim over non-coverage.
If I drink and crash my car, my insurance won't pay me. I can sue them and the judge will tell me to fuck off. In a poor analogy of my fictitious example, I can ask the pool of other drivers to judge whether the insurance should pay or not, and if they say no, sure I can also go to the judge, and she'll say "Sorry, the contract says the pool's decision is final.".
Because of the terms of your insurance agreement that will clearly disavow coverage in this circumstance.
> In a poor analogy of my fictitious example, I can ask the pool of other drivers to judge whether the insurance should pay or not, and if they say no, sure I can also go to the judge, and she'll say "Sorry, the contract says the pool's decision is final.".
The thing you don't get is that insurance agreements are already legally binding agreements which is why coverage decisions are made with respect to the facts of the matter and the terms of the insurance agreement. As an insurer, if you do not cover something that the agreement requires you to cover, the insured will win win in court and get the coverage.
>Insurance schemes pool the insureds' moneys together in case something bad happens to one of the insureds, of course it'd be in all the insureds' best interest that the money is used properly, if the company says "We won't fight this particular patent troll", it's also in the pool's interest to tell the company "Wait, we think this is a valid case, and you have to fight it!", because otherwise, when a similar patent troll shows up trolling one of them, the insurance company will also ignore it, leaving them exposed.
Insurers make the decision based upon the terms of the insurance agreement that they signed.
Lobbying should be banned. Fix the root of the problem.