What Grinds my Gears
I was wondering what I'd blog about this week. Maybe more pie in the sky vision stuff. Maybe an update on building out electronics - first round integration testing done, modifications underway. And then I had a short Twitter exchange over this: http://www.clownshoesbeer.com/uncategorized/11334/
I would make some statement of incredulity, but this kind of thing is fairly common in the software and technology world. It's just a cost of doing business.
While this doesn't really fall under the "patent troll" label, the tactic is essentially the same. In short, the recipe is this:
- Find someone who is probably not infringing on a patent, but likely doesn't have enough money to fight it out in court. I've heard the range is around $250,000 to $500,000 - that's one quarter to one half of a million US dollars, folks. The number cited in the post is "$300,000 to $400,000". That's whether the Defendant wins the suit or not.
- File suit against - or just threaten to - said entity from step 1. In the suit, it helps to make outrageous claims about damages and ask for absurd awards from the court. It frightens your target and makes them more likely to fold, which is what you want.
- Settle out of court for less than the threat, but much more than zero. And all because you wrote a letter or two, and possibly filed a lawsuit.
This kind of thing bugs me for a few reasons. To me, this tactic of "we're going to sue you for millions unless you settle for some lesser (but still large) sum" feels like some kind of legalized extortion. You know what I mean - "Nice shop you have here. It would be a shame if something were to happen to it." I know it's technically not, that's just how it feels.
Generally, suits like this are filed (or threatened) by "Patent holding companies" AKA "Non-practicing entities." This case is a little different - the owner of the trademark in question actually makes a product under the trademark in question. Trademarks and patents are different things. The game is the similar in this case. It bugs me less since trademarks need to be used in commerce. It still bugs me because as the author of the post implies, "a phone call or a cease and desist letter" would have been sufficient to clear things up. Just like it's more neighborly to knock on the door of the loud party than to just call the cops.
Lawsuits like this also hurt the consumer because they drive up product costs and shift focus from the actual business. All that time and effort spent with lawyers is time not spent brewing, distributing, and engaging with customers. All that money spent on legal costs needs to be recouped and that can lead to higher prices overall.
And who gains from this type of lawsuit? In this case, the Plaintiff actually defended their trademark. I get that. I've spent more on branding at this point than anything else, so I don't want folks making that less valuable for me. That said, I'll call a competitor and say, "Hey, let's talk" before I call my lawyer. And of course, that's who gains: lawyers. Win or lose, suit or no suit. As long as they conduct themselves within the law and their ethical code, they get paid and will continue to get paid. Everybody's got to put food on the table. That said, if your lawyer is the kind that recommends a law suit before a friendly phone call, might I recommend that you fire them? Thanks from the rest of us just trying to get by doing what we love.