> "But a behemoth like Microsoft or Sony? Why pay up?"
You don't negotiate with terrorists, because there's no real barrier to entry into terrorism. At its simplest, someone just needs a gun and a lot of nerve. There's no real competition to get a gun, they're fairly inexpensive, and there's no shortage of desperate people for whom such a payment represents the best near-term opportunity.
Patent trolling, however, has significant barriers to profitable pursuit. The only people who can likely get into it are already-wealthy professionals and there's not exactly a huge pool of those people, for whom such a pursuit represents the best near-term opportunity.
So the only people you're likely to 'encourage' are organizations like IV that are already doing it and are the exact same groups you're paying off with 'investments'.
Longer Explanation:
To patent troll you need at least a patent and a patent attorney. But not just any patent will do -- you need one that allows you to assert rights over a fairly broadly-implemented technology, with a sufficiently-early priority date so as to stand up to an inexpensive search for prior art. And, unlike guns, those are currently in high demand, limited supply and there's generally direct competition to acquire them.
Competent patent attorneys aren't exactly growing on trees either. Particularly those who would take on the risk of this kind of business as opposed to pursing other IP work.
Beyond that, you need enough resources to plausibly survive a whole bunch of lawyerly conversations/negotiations with your targets and probably a patent trial or two. Even for the troll, a patent trial represents 1-2 million in fees. [1]
So what you really need are enough patents on fundamental technologies so that the small "licenses" add up faster than the legal/opportunity costs of your attorney(s), and still leave enough money for your own end to be worth-while.
And "enough patents" also implies "enough shell companies" to ensure that each individual suit doesn't carry a downside risk of ending your entire operation. [2]
So now you're looking at escalating attorney's fees for setting up these shells and rents on small offices for each, in a 'friendly' legal district.
Never mind that at any moment the US Supreme Court or Congress could step in and not only zero out your current portfolio's value, but could outright gut your entire business plan. [3]
So, quite unlike with terrorism, you can only really get into patent trolling if you're an already-wealthy professional who (for whatever reason) has no better prospects in a market and industry where basically everyone has better prospects.
The only people for whom it's a particularly plausible option, are those who either lucked into one or more particularly valuable patents, or someone who had already acquired a great number of such patents before the industry really recognized the value of patents in the hands of an NPE.
[1] Even if you partner with the attorney, their opportunity cost would have to be plausibly re-coup-able if they're going to go along with your business instead of just getting other clients. So it's not like the 'cost' can be ignored entirely.
[2] Without shell companies, if someone wins a judgement of attorneys fees, they're going to take your warchest and patent portfolio and you'll be done.
[3] That certainly doesn't seem likely any time soon. But it's a real, non-zero risk of wiping out your whole enterprise.
You don't negotiate with terrorists, because there's no real barrier to entry into terrorism. At its simplest, someone just needs a gun and a lot of nerve. There's no real competition to get a gun, they're fairly inexpensive, and there's no shortage of desperate people for whom such a payment represents the best near-term opportunity.
Patent trolling, however, has significant barriers to profitable pursuit. The only people who can likely get into it are already-wealthy professionals and there's not exactly a huge pool of those people, for whom such a pursuit represents the best near-term opportunity.
So the only people you're likely to 'encourage' are organizations like IV that are already doing it and are the exact same groups you're paying off with 'investments'.
Longer Explanation: To patent troll you need at least a patent and a patent attorney. But not just any patent will do -- you need one that allows you to assert rights over a fairly broadly-implemented technology, with a sufficiently-early priority date so as to stand up to an inexpensive search for prior art. And, unlike guns, those are currently in high demand, limited supply and there's generally direct competition to acquire them.
Competent patent attorneys aren't exactly growing on trees either. Particularly those who would take on the risk of this kind of business as opposed to pursing other IP work.
Beyond that, you need enough resources to plausibly survive a whole bunch of lawyerly conversations/negotiations with your targets and probably a patent trial or two. Even for the troll, a patent trial represents 1-2 million in fees. [1]
So what you really need are enough patents on fundamental technologies so that the small "licenses" add up faster than the legal/opportunity costs of your attorney(s), and still leave enough money for your own end to be worth-while.
And "enough patents" also implies "enough shell companies" to ensure that each individual suit doesn't carry a downside risk of ending your entire operation. [2]
So now you're looking at escalating attorney's fees for setting up these shells and rents on small offices for each, in a 'friendly' legal district.
Never mind that at any moment the US Supreme Court or Congress could step in and not only zero out your current portfolio's value, but could outright gut your entire business plan. [3]
So, quite unlike with terrorism, you can only really get into patent trolling if you're an already-wealthy professional who (for whatever reason) has no better prospects in a market and industry where basically everyone has better prospects.
The only people for whom it's a particularly plausible option, are those who either lucked into one or more particularly valuable patents, or someone who had already acquired a great number of such patents before the industry really recognized the value of patents in the hands of an NPE.
[1] Even if you partner with the attorney, their opportunity cost would have to be plausibly re-coup-able if they're going to go along with your business instead of just getting other clients. So it's not like the 'cost' can be ignored entirely.
[2] Without shell companies, if someone wins a judgement of attorneys fees, they're going to take your warchest and patent portfolio and you'll be done.
[3] That certainly doesn't seem likely any time soon. But it's a real, non-zero risk of wiping out your whole enterprise.