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Comment by ta988 | Hacker News Reader

It is really sad to see kost companies refused to fight. Congrats on that one Cloudflare, may that serve as an example to destroy those grifters.

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You can see why, though. Even in this case where they thoroughly won, and got damages, the damages were just $225K, and they probably spent millions on legal fees, employee/founder time, etc.

Ultimately, the American legal system is pretty broken. If someone brings a frivolous lawsuit against you, and you defend yourself in court, nearly 100% of the time you’ll be losing money, often a lot of money. This is the core reason why patent trolls exist, why companies normally settle out of court - it’s cheaper to do so.

But if we'd given in to one of these trolls, others would have targetted us.

Agreed, it’s a lose-lose situation really. But the reason most companies just settle is that going to trial is so expensive, and the American legal system allows these frivolous lawsuits while generally awarding either no compensatory damages, or damages far below the cost of the defence.

A few states have passed laws to ban abusers from the legal system:

https://en.wikipedia.org/wiki/Vexatious_litigation#United_St...

Usually a "vexatious litigant" is not one of these patent trolls, but some nut job who spends his days at the courthouse.

If more companies let patent trolls go to court their repeated losses would fall under the first part of California's definition, but since they settle, trolls are technically not even litigants.

Most patent trolls file in the Western District of Texas; it's a troll friendly district with a troll friendly judge. They sometimes win with garbage patents.

How much does it cost to argue in court that a particular entity is an abuser though? Someone has to be willing to cover those costs up front, otherwise people will just keep settling if they don't want to go through that process.

It's not just cost, it's cost x uncertainty of outcome. A settlement is very tempting from cost x uncertainty alone. But it also has other merits: when the rich, powerful incumbent gives in and settles, the fragile thrifty upstart won't see the slightest chance of winning and either beg the troll for an affordable licence (but they won't get a good offer) or look for a completely different line of business. To the incumbent, the settlement is a fee paid for moat-as-a-service provided by the troll.

At Google I did a piece of research, along with a statistician, of whether it's better to settle or fight.

"Better" would mean you don't get sued as much in the future, because you're a hard target and not easy money.

They haven't released this study, AFAIK.

your definition of "better" implies the results of the study, although you did not specifically say it.

That's because it's not published, plus a conclusion without any supporting data and methodology is pretty worthless.

I couldn't tell from the article but it seems the $225k was a settlement, and the release of all patents was additionally part of the settlement - I doubt the court could have awarded that directly. So they took $225k + the release of the patents, and I assume that the trolls would only have agreed to that if they felt the court awarded cash value would have been significantly higher.

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