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Comment by ikeboy | Hacker News Reader

If you know you have a valid case (you aren't a troll), how hard would it be in practice to find someone to front the money for a lawsuit? Or for that matter, could you go to the competition and sell your patent? That is, say Apple's infringing on my patent; will Samsung buy the patent from me for a fair price and then sue Apple?

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> how hard would it be in practice to find someone to front the money for a lawsuit?

What about paying into an troll insurance policy every month so that if a troll wanted to sue you they would see that you were protected and would fight the lawsuit with a giant pile of money. This might deter the troll from suing in the first place.

That is essentially what RPX Corporation provides

There is a whole ecosystem that is funding these lawsuits. It also operates somewhat anonymously, with funding sources working directly with law firms and indirectly with inventors (if they are even involved anymore). I've seen emails between law firms and the inventor that literally title the investors as "the funding source." The original inventor need not put any money at risk, and the law firms and funding sources do their own diligence to decide if it's worth proceeding to file suits. In most cases, the entity filing suit is created for each series of attacks so that if they actually lose a suit and are supposed to pay out, there are no assets from which to pay. Therefore, low risk and potentially very high reward.

The biggest factor for that is not the validity of the patents, but the breadth and ability of the patents to be filed against "juicy" targets with a lot of cash. The cost of filing a suit is literally in the hundreds of dollars (I think ~$750) and most of these cases get settled out fairly early because of the immense cost of the defendants to complete the discovery process.

>how hard would it be in practice to find someone to front the money for a lawsuit?

I'm paraphrasing, but 'Just assign your patent to [some group of investor/trolls] and they'll let you know if they can make anything of it.'

Patents do virtually nothing useful for small businesses/solo inventors. There are exceptions, but they are exceptional.

This is true, except for tech and biotech startups, where patents have been shown to facilitate funding, potentially by signaling future success. Less than 1% of inventors get anything from their patents.

However to me this signals the possibility of an inefficiency in the market, and something that trolls leverage. Intellectual Ventures was reputedly originally formed to fix this gap.

to find someone to front the money for a lawsuit?

That is one of the problems, he who fronts the money expects to get the reward. Hence class actions where the lawyer who works on contingency gets millions and those wronged get a nickle.

Of course, but

1. You'll still get a significant sum if the total is significant (and if the case is open-and-shut, the risk wouldn't be too high for an investor, so you could get a favorable deal)

2. The infringing company would have to pay in full, which discourages them from doing it in the first place.

I guess I really want to know is if this actually happens in practice, or if there are reasons I'm not thinking of that stop it from happening.

The cost is not just the lawyers' time (which you may be able to get on contingency), but the administrative time: managing the lawsuit, discovery, assembling evidence, time of witnesses, and so on. Then there's the business risk: lawsuits only happen when both parties think they have a case, so by definition one of them will be disappointed.

The selling out to a bigger player does happen, although since it's a distress sale it's often for a low value.

Some Patent lawsuits are taken on contingency (the winning lawers get a good size cut).

This isn't common. See Jarg corp which was basically out of cash, then hired lawyers on contingency (with patents licensed from Northeastern University) then sued google. I think google paid northeastern in a settlement.

There are people who specialize in evaluating patents and being the middleman if they believe there is value in licensing and/or asserting your patents. They are often thought of as just another breed of patent trolls.

If the patent is genuine, why would those people be trolls?

Because agencies specialising in licensing a patent (i) are non practising entities, and many people's view a troll is pretty much defined by the concept of acquiring IP without the intention of doing anything with it other than seeking fees, and (ii) occupy their time sending legal threats to firms already using aspects of the patented invention rather than delivering sales pitches to people searching for technological breakthroughs, because "the right to develop your own technology which does X using Y" is a really hard sell.

'Genuine' with respect to patents is a very low bar. They've issued patents on any number of scientifically impossible inventions, in spite of rules against that sort of thing. So the courts are usually required to sort it out after many years and endless litigation.

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