Take the 2-minute tour ×
Ask Patents is a question and answer site for people interested in improving and participating in the patent system. It's 100% free, no registration required.

Let's say a small software developer simply does not have enough money to pay the extreme costs of a patent infringement lawsuit. What happens in this case?

Situation B: Let's assume the software is developed by a limited liability company owned and directed by the developer.

Situation C: Let's assume the software developer (or company) is located in the European Union.

So the questions is what happens in the above situations where the developer (or the developing company) has not enough financial resources to pay the high costs of the lawsuit? What are the consequences?

share|improve this question

2 Answers 2

It's not 100% clear to me from the question which side of the dispute the small developer finds themselves on. If they are the inventor/patentee and a large company is blatantly making tons of money infringing the patent, the small developer might find a law firm to take the case on contingency.

Or they might work out a deal with an NPE to buy the patent but grant them back a paid up license. The developer might get a chunk of money and a % of what the NPE can make from the patent. This can be a very legitimate role for an NPE; collect and bundle individual patents from diverse small fry and go after an industry giant who is ripping them all off thinking they are too small to do anything about it. Others have different views of NPEs, of course.

share|improve this answer
    
"Others have different views of NPEs, of course" hence the term - patent troll. –  Ron J. May 9 '13 at 12:54

On the other side of the coin - if your EU company is facing a lawsuit due to their product allegedly infringing on a US patent. The cheaper alternative offered by the (nearly all) NPE/patent-trolls is to settle for a "lesser than legal costs" amount. This saves litigation costs and time - and unfortunately many big companies just pay up the small amount (for them) and make the headache go away. This gives the NPE/trolls cash in their pockets to continue the cycle, switching corporate shells along the way by transferring assignments of patents back and forth. Defending against an infringement suit is extremely difficult and absurdly expensive, the NPE/trolls know that and it costs so little to spray a hundred lawsuits around - something will stick. And even if the NPE/trolls lose a case, they simply fold up that corporate tent and come up with a new entity to transfer assignment and repeat their actions. There is little or no recourse for the non-infringers (who win a case). Once accused of infringement you pay either way, might as well pay the lesser amount and take a business write-off.

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.