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Comment by hkmurakami | Hacker News Reader

Newegg and Rackspace are definitely building a reputation for pushing back against patent trolls and even borderline-legitimate (maybe?) cases like this one. I wonder how we as outsiders can go about assessing the impact of building this reputation (ex: a troll going after various retailers but not Newegg, for instance)

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As soon as that happens it will validate Newegg's strategy, and only further incentivize other companies to adopt it.

It's like feeding the troll...in reverse.

Starving the troll. :) Nothing lasts forever. I think this immoral money-making tactic is on its way out.

I doubt it. There's still money to be made shaking people down for IP.

More apt perhaps would be: "curb-stomping the troll, desecrating the remains, and then mailing the whole mess in a bucket to its mother"?

Other companies that can afford the first six patent lawsuits necessary to build up a reputation? Maybe.

Other companies that can't even afford to win once? Hardly.

I'm surprised more companies don't do this, because it seems to me that the impact is clear: Like ambulance chasing, patent trolling relies on the simple principle that it's much, much cheaper to settle than to go to court -- for both sides. It's huge that they won, but they didn't need to. By sending the message that they will always go to court, my guess is they'll stop being sued.

On the other hand, the trolls know this, and may react by targeting companies that do this to demonstrate that it's not an effective strategy.

It's basic game theory. A single company standing up to the trolls is unlikely to make any difference (or at least looks unlikely in the absence of an example like Newegg), and may incur costs far greater than if they simply folded. If everybody stood up to the trolls together, then everybody would be better off, but the better strategy for the individuals is to fold. Prisoners' Dilemma writ large.

Some one has to throw the first blow to the trolls, now they lead and others will follow.

I continue to wonder why more companies being threatened by patent trolls don't band together to share legal expenses of a defense. Is there something in the legal rules and procedures that prevents a shared defense?

Yes, except that what we're starting to see is once a company settles with one troll, others hear they're an easy mark and show up with more demands. So even for a single company, settling is starting to become a bad strategy. As soon as you settle with one, that's that much less money you have to fight the next one with... and there will be a next one.

"Newegg and Rackspace are definitely building a reputation "

I can assure you that the overwhelming majority of their customers don't care about this and of the ones that do any a portion of them would be able to even change buying decisions over it.

If you are the IT director explaining to your boss that you want to deal with Rackspace or Newegg (and pay higher prices or get not as good of a product) because of this just won't fly. If anything it even makes your judgement suspect in the same way that wanting to give business to your brother in law might. It's not an arms length decision process.

Larry, I normally agree with you quite a bit. But you're not seeing how much this helps them in the future. You're totally discounting the value of (a) not being sued as often and (b) not having to pay license fees that directly take away from profits.

How much did they spend on this trial? How much was Alcatel asking for a license fee ($19 million). Did they litigate this for less than $19 million? I bet they did.

People seem to misunderstand that the point I am making (sorry if this is not clear) has nothing to do with whether they should or should not have settled this case. Only the attitude of the legal officer and the statement that he made.

The statement he made will have the effect of further reducing the number of cases that he has to fight...

If he were really interested in troll-stomping over all other interests he would be better off saying "We may have won this one, but most of the time we like to settle".

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