What about the situation with east Texas where they side with the patent holder the majority of the time?
Under this I might almost be more likely to just settle. Do I pay nothing, a paltry sum to settle, or 2-4x the cost without "loser pays" to lose? If I have even a 10% chance of losing it sounds like settling might be a good deal.
Not to mention that the costs to the losers the few times they win would really scare anyone who isn't able to eat the massive costs anyways. Would you sue someone from stealing thousands from you if there was a small chance at you owing them millions?
(I'm not an expert on the subject, but it's been discussed before on HN, and this is my recollection.)
It occurs to me that an interesting variation would be for the loser to pay an amount equal to the lesser of the two parties' legal bills. That would limit the risk, and remove the incentive for the deeper-pocketed party to spend money just to inflate the bill.
I am small troll A suing company B. I lose, judge orders that troll A pay all the legal fees. I don't have the money, I file bankruptcy, I flee the country.
Lawyers still want to get paid. I doubt any legal team will just chase some random around into collections because "loser pays"
I remember a comment a while back on HN or somewhere which suggested an approximate solution to this : the loser must pay the costs equal to its or the winners fees- whichever is lower.
Are there caps? Is one side prohibited from charging substantially more than the other?
I think it would somewhat depend on the judge's assessment of the situation, but I would think so long as you're acting in good faith they'd likely rule for you to pay whatever costs you can afford, and the rest would be covered by public finances.
It wouldn't surprise me to hear of judges deciding that the defence's legal team is grossly excessive and telling them they're not claiming for everything either, at least in the UK judges have quite a lot of leeway in what they can do in their own court room.
If the max cost of predatory practices isn't much higher than the gain from using them in the rare cases when caught, it creates an incentive to use such practices.
This isn't a complete economic argument in favor of companies behaving poorly. Punitive damages pale in comparison to a threat of loss of future business dealings as a result of poor behavior.
Japan, for instance, prohibits punitive damages. Is there any suggestion on your part that companies there are somehow more "predatory" than ones here in the US?
That fully depends upon how you simulate humans in one's argument. For a generally rational generally well informed human this is likely true (note I'm not even going with the 'fully rational fully informed'). But for the majority of consumers, there is less cost and there are ways to reduce the cost further. There will be some impact when the news breaks (if it breaks, the story being publicly available is a world of difference from the story being CNN/Fox New's headline of the day), but people will quickly lose interest or otherwise stop caring. While punitive damages may not be enough to fix the issue, I think there is an issue and I think the issue would be worse without them.