Definition - "Patent Troll"

"PATENT TROLL" - Any party that intentionally misconstrues the claims of their patent to assert it against another. A patent troll does not have to be a non-practicing entity (NPE) or in any particular industry, all that is required is an intentional misconstruing of the claims in an attempt to extort money from another.


Disclaimer - All information and postings in this blog are provided for educational purposes only. Nothing in this blog constitutes legal advice and you should not rely on any information herein as such. If you do not have a signed engagement agreement with me, then you are not represented by me and you should retain your own attorney for any legal issues you are having.

Thursday, June 16, 2011

Financially Viable Patent Defense Strategy for Application Developers

Some commentators believe low-income application developers have no ability ($$$) to defend themselves against absurd patent claims like Lodsys is pursuing.  Such commentators fail to think outside the box and are stuck in sort of an old world way of thinking that does not actually provide real solutions to application developers.

Various commentators, including myself, have mentioned that application developers (or other companies) could join in a joint defense agreement.  The costs of a winning strategy against Lodsys could cost a minimum of $50,000 - $100,000, so even if the couple dozen threatened developers get together, they might still have to pitch in at least $10,000 each.  This may not be feasible or a good business decision for some application developers.

However, there is another option available to application developers and I believe this has to come from the developer community itself.  While this could be tough to implement quickly to deal with Lodsys and Macrosolve, this may help deal with future threats.

The application developer community as a whole, not just those developers that are directly threatened, could start a App Dev Patent Defense Organization.  This could be implemented in may ways and I am sure people will have contributions to this that I have not thought of, but here are the basics:

1) Application developers join and contribute a yearly fee ($500?) to an organization that is solely created to defend members against patent infringement claims. 

2) If massive participation could occur (I've seen the number of publishers near 90,000, but I have no idea if that is true)  If 10,000 developers join, then the fund would have $5 MILLION dollars PER YEAR to defend against the likes of Lodsys and Macrosolve!

That is a sizable amount of cash to defend against any patent threat, as most patent infringement accusations are disposed of for a lot lower amount than that.  There would be a lot of organizational details and structure to work out.  I would suggest to have some type of Troll test so as not to defend against actually valid claim assertions, though that might be too limiting; an alternative may be to limit the fund for paying for defense costs but not paying for judgments of actual infringement.  The fund should not provide coverage for actual infringers of valid patents.

If one of the OS makers (Apple, Google, Microsoft, etc.) included contributing to the fund as a requirement to use their app store, then massive participation could occur.  However, the App Dev Patent Defense Organization should be independent of any OS maker and owe a fiduciary duty to the app developer members, not any OS maker or other distributor. (though conflicts between members would have to be addresses also)

What do people think?  Let me know your thoughts.

Just my thought for the day, if you need legal advice, go hire an attorney.

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