The threat that Lodsys represents to anyone doing technology is so large that it would seem to make sense to band together. I'm thinking along the lines of creating a "Patent Defense Cooperative" where members pay a certain amount every month for the three purposes of a) patent lawsuit insurance, b) to fund lobbying efforts to reform the patent system, and c) scrutinize a judicial apparatus that seems biased in favor…
>patent lawsuit insurance Lawsuit insurance is interesting. The problem seems to be that if an insurance company is funding the defense then they have the same incentive to pay a settlement rather than fight that anyone else does, and that would just cause even more money to go into the pockets of trolls by giving them a deep pocket in the form of the insurance company, exacerbating the problem (and making the premiu…
Not true at all. The difference is that the individual needs to factor in the cost of one defense (tens of thousands of dollars at a minimum - PLUS the chance of loosing and then going out of business) versus the cost of the settlement (perhaps a few tens of thousands of dollars). Financially, it makes no sense to pursue the case.
The insurance pool needs to factor in the cost of ONE defense (tens of thousands of dollars at a minimum -- PLUS the chance of loosing and then owing a court's determination of a "reasonable cost" for licensing the patent for all the pool's clients) versus the cost of ALL the settlements (a few tens of thousands of dollars times how ever many clients the pool has).
A pool doesn't need to get very big before it's financially advantageous to pursue cases you are likely to win and to settle cases you are likely to lose. (By comparison, for individual companies, the best short-term benefit is gained by settling in ALL cases.)