Extrajudicial action disguised as "settlement" or masked as "protection"

Summary: Charlatans pretending to be inventors (or defending inventors) are still blackmailing software developers using patents which are likely bunk, should never have been granted, would never be upheld by any court, but are still not being challenged due to the high cost of legal battles

AS noted in the previous post, when large companies shell out money for 'protection' from trolls they merely give the trolls appetite for more lawsuits (and/or threats of lawsuits). It harms small firms the most. They're incapable of focusing on patent battles and are thus likely to settle without even challenging the claims/accusations. This problem is a growing problem in Europe (thanks to the EPO being derailed by its management), whereas the US sees many of the trolls migrating to China (the USPTO also tightens patent scope well before patents even reach courts).

For those who wonder why it matters so much, reading this new article by Babak Abrishamchian might help ("Patent Trolls Reportedly Shaking Down Indie Devs"). It's universally true that patent trolls target those least likely to be able to afford a potent legal defense against patently bogus software patents. From the article:

Playsaurus, the Indie Devs behind Clicker Hero 1 and 2, have announced that a patent troll by the name of GTX Corp, demanding a $35,000 licensing fee in order to continue business. The patent troll threatened legal action against Playsaurus, stating that should they not pay the $35,000 fee within ten days, “costly litigation” would occur. The patent in question involves the use of in-game currencies, which is present in just about every video game with microtransactions ever.

In a statement on Playsaurus’ website, CEO Thomas Wolfley stated the company would fight these legal threats, including the company’s official response to GTX Corp and the patent in question. When discussing the reason Playsaurus is being targeted, Wolfley attributed it to several recent pieces of legislation in American government which have made it easier to fight patent trolls, but only if you have enough money to go to court against them. “What they’re asking for, $35,000, is about half a year of salary for one of our employees,” Wolfley said. “I am concerned that they may be preying on a lot of other small studios, in a final attempt for them to profit off this bogus patent (which only has about 2 years left on it).”

$35,000 may not sound like a lot of money (to large corporations), but for small firms that may be enough to employ someone for a whole year. Such a demand can completely doom a business or eliminate someone's job. What happens when a dozen such demands are made in one year? Surrendering to demands may simply signal to yet more trolls that the toll booth is welcome. It may never end. Many American businesses (some of which we heard about or from) have fallen for this terrible scam. Paying 'protection' money rarely helps and may in fact exacerbate matters. Cost of a legal battle can easily exceed $35,000, especially upon appeals. This system is broken when justice is more expensive than injustice. ⬆