Ways Startups Can Deal With Patent Troll Demands | Hacker News Reader

Ways Startups Can Deal With Patent Troll Demands

techcrunch.com

52 pointsiProject9 comments

Start-ups generally don't have a problem until they get into the making-money or getting publicity stage. After that you'll pick up all kinds of parasites, patent trolls are only one of the many classes these fall into, and they're not nearly the most frequently encountered ones.

Look out for: rogue angels, investment bankers, bad partners, bad leave co-founders and so on. Lots of people want a slice of the start-up pie without pulling their weight.

What are rogue angels, and why are investment bankers bad?

Rogue Angel -> Angel that will use some of their money in order to get a bit of stock which they then use in a minority shareholder lawsuit in order to try to leverage that into a larger amount. Start-ups can't have distractions like that so people that pull that stunt can hold you over a barrel. I've seen this up close and it isn't pretty.

Investment bankers are not bad by definition, but on the whole they're worth a lot less than they give themselves credit for. They presume to be an in-dispensable part of the deal universe but in actual fact they can be as much of a hindrance as they can be a help. Oh, and they always want to be paid, even when they don't perform at all.

I see, thanks. I didn't know about rogue angels, it's too bad such scammers exist.

From time to time, my dad would be asked to answer alleged patent infringements where he worked. He said he was able to easily deal with them by looking at the initial claim of the patent and explaining that the initial claim did X where as they did Y. That was good enough to stop any further allegations of patent infringement.

This was 20+ years ago. Perhaps, in todays "market", lawyers would still push.

I think there may be some merit to this. The assumption of the patent troll may be that you will not look at their patents. (They are junk, remember?) They may just assume you will believe you need to hire a patent attorney and that the patents cannot even be assessed with so much as a sniff test without first spending thousands of dollars. And the cost will scare you into submission.

If you were to call the troll's bluff and go the distance (rare), eventually your patent litigator that you are paying through the nose is going to be challenging every possible claim in discussions with the troll's lawyers before anyone steps foot in a courtroom. Chances of success in court are going to be considered, and argued. The simple fact is the troll's chances might not be so great. Why do so many cases settle? The troll only needs to scare you into settling, and that's all. Mission accomplished.

I'd say the sooner you start asking those questions about the troll's chances, the more pressure you put on the troll. They have to pay their lawyers, by asking them to devote time to the matter, to deal with the questions in order to maintain fear in you. Meanwhile, in asking these questions you haven't had to pay any lawyers to look at the patents yet. (And they don't necessarily know that.)

The whole patent trolling system is built on fear and the high expense of patent litigation. Even for the most bogus patent claims, it can cost thousands of dollars to have a court declare them as such. Take away that expense, and the fear of having to pay it, and the trolling business goes "Pfft."

If I will be small and troll persist - I will close and open new company.

If I will be big and troll persist - I move all operations out of USA except office with sales people working on a contract.

What troll get from this - nothing. What USA get from this - negative tax income. What will change for me - employer.

Has anyone here on HN been on a receiving end of such letters?

"Don’t make it easy for them. Require registration before granting access to whitepapers, detailed documents, or video tutorials that delve into the behind-the-scenes details. Think twice about being on customer lists or advertising the ins and outs of your business, the products you use, etc., unless there’s a good business reason for doing so."

This seems like a great way to kneecap your business. Make it hard for potential customers to evaluate you (so they end up choosing companies that are more open), make it less likely that you will get positive buzz in tech or press circles, make it less likely that people will feel confident about your product as a result of understanding it, and make it harder for new customers to learn how to use your product. All because you're afraid of patent suits!

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