Fark's Drew Curtis Explains How To Beat A Patent Troll (And Live To Tell The Tale)

from the don't-negotiate-with-terrorists dept

A few years ago, we wrote about a patent troll known as Gooseberry Natural Resources LLC who claimed to hold a patent (US Patent 6,370,535) which it believed broadly covered putting press releases online. It then sued a ton of companies, including Fark, Reddit, Slashdot, Digg, TechCrunch and others. While most of the companies played into Gooseberry’s hands and “settled” along with the standard non-disclosure agreement (NDA), we pointed out that Drew Curtis at Fark stood his ground, and got Gooseberry to settle for nothing and (even better) to agree to no NDA — meaning he’d be free to talk about it. This is important, because trolls rely on claims that they “settled” with others to insist that other companies recognize the validity of their patent. This isn’t true. Many (perhaps most) companies settle because even if you were to win, it’s usually cheaper to settle than to go through with the lawsuit.

Of course, unburdened by an NDA, Drew is making sure lots of people know what happened, and he recently did a TED talk in which he explains how he won, including some key suggestions for others in his shoes:

The key lesson: don’t negotiate with terrorists. As he points out, patent trolls have cost the US economy significantly more than terrorist attacks. He has three other points:

  • Don’t fight the patent, fight the infringement. Basically: overturning a bogus patent is crazy expensive and takes forever. It’s generally much easier to show you didn’t infringe — yes, even if the patent is ridiculous. This is a problem with patent law today, but it’s not one that anyone seems interested in fixing.
  • Make it clear from the beginning that you have no money, or you’d much rather spend it on your own lawyers fighting this than giving it to the troll: the law firms that represent trolls almost always work on a contingency basis, meaning they only get paid if money comes through from the people they’re suing. If that seems unlikely, the lawyers are much less interested in fighting, and are happier to “settle” often for little or no money.
  • Let them know you’ll make the process as annoying and as painful as possible: Basically flip the patent troll strategy back on the trolls themselves. Remember, the lawyers are on a contingency basis. Why bother with the annoying small company when they can be shaking down big companies who already have budgets set aside to settle such bogus lawsuits.

It’s good to see Drew continuing to speak out about this and spread the lessons of his experience.

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Companies: fark, gooseberry natural resources

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Comments on “Fark's Drew Curtis Explains How To Beat A Patent Troll (And Live To Tell The Tale)”

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38 Comments
Skeptical Cynic (profile) says:

I have a patent on this patent troll beating strategy

I don’t know who this TED guy is but by posting the video on how to beat patent trolls from Drew Curtis he has infringed on my patent and he will be sued.

I own the patent on disseminating information in any form on defending yourself and your company against patent trolls. So I will also be suing TechDirt for disseminating the information and for furthering the dissemination of the information about the video.

Anonymous Coward says:

“As he points out, patent trolls have cost the US economy significantly more than terrorist attacks.”

He was doing good until this statement. Mike, you have said yourself that money out of one part of the economy (say people not buying music) really doesn’t hurt the economy because the money gets used for something else. In this case, the lawyers get paid, they pay their rent, they pay their employees, and so on. The economy isn’t “hurt” as it’s a neutral thing. The money goes to A or B.

It might be more correct to say that SOME companies have suffered individual impact by having to pay these things. But the economy as a whole? It’s still there, still intact.

:Lobo Santo (profile) says:

Re: How to comment on the internet:

…so money to patent trolls is just as good as investing in innovation?

Do you have an inability to see the difference between the statement “money spent on entertainment x or on entertainment y makes no difference economically” and what you’ve said?

Really??

Please pull your head out of your ass before commenting again. Thank you.

Skeptical Cynic (profile) says:

Re: Re:

AC, please go away. You need to understand that economic losses are not as simple as you would like them to be. I am not even going to bother to try and get in to a explanation as to the difference between each but read below.

So simple thoughts for you. If someone is able to obtain money (aka value) that they have not earned through a process that creates no economic value, creates no economic activity, and removes value (money in this case) from a value producing entity than that can be counted as an economic loss.

Richard (profile) says:

Re: Re:

that money out of one part of the economy (say people not buying music) really doesn’t hurt the economy because the money gets used for something else. In this case, the lawyers get paid, they pay their rent, they pay their employees, and so on. The economy isn’t “hurt” as it’s a neutral thing. The money goes to A or B.
By that logic investing in a jewel heist is just as good as investing in drug research.

E. Zachary Knight (profile) says:

Re: Re:

You are correct. That money is still in the economy. Unfortunately, that money is no longer going into the growth portion of the economy. The money that is being paid to patent trolls is helping to stagnate the economy.

On the other hand, when a “pirate” takes money that the would have otherwise spent on movies and spends it elsewhere, it is often spent in growth areas such as technology.

Anonymous Coward says:

Re: Re: Re:

“You are correct. That money is still in the economy. Unfortunately, that money is no longer going into the growth portion of the economy.”

How do you know that? Maybe the money was used to purchase houses out of foreclosure, which in turn boosts the economy. The point is the money is removed from the market and burned in a furnace as fuel, it recycles in other places.

This is Mike’s standard argument about why losses in one industry are not bad for the economy as a whole. He cannot have it both ways – either it’s bad for the economy, in which case Miek got it wrong, or it’s okay, and Drew got it wrong.

Either way, it doesn’t add up.

Anonymous Coward says:

Re: Re: Re:2 Re:

” If someone is able to obtain money (aka value) that they have not earned through a process that creates no economic value, creates no economic activity, and removes value (money in this case) from a value producing entity than that can be counted as an economic loss.”

…and if you could think past the end of your nose, you might realize that the money obtained in this manner doesn’t “disappear”. It isn’t burned and destroyed, it is cycled back through the economy, generating (gasp) an equal amoutn of economic GAIN for the law firm and it’s clients.

Since they don’t destroy the money when they get it, the money clearly stays in the economy. NET, there is no change.

That’s Mike’s explanation of things. Would you like to explain to him why he is wrong?

Anonymous Coward says:

Re: Re: Re:3 Re:

I’ll take a crack at explaining it…

The simplistic assertion is that the money transferred from the innovator (defendant) to the troll (plantiff) has the exact same value to the overall economy as that same amount of money spent as if the innovator got to keep the money and spend it innovating.

This assertion is false because it distorts the value proposition. Generally speaking, the troll is going to take that money and use it to continue trolling, extorting additional innovators and extracting additional value from the overall economy. While the innovator will use that money to continue innovating, ADDING VALUE to the economy.

In simple terms, this argument is a classic “broken window fallacy”. Just because the glass man gets paid to replace a broken window doesn’t mean that it makes sense to simply go around breaking everyone’s windows to keep him busy. Sure, his work is “economic activity”, but the act of breaking the window in order to stimulate that activity requires you to destroy something of value (a non-broken window).

That’s precisely what the patent trolls are doing, destroying value.

Anonymous Coward says:

Re: Re: Re:4 Re:

Okay, now then, can you explain to Mike why money that would have been spent on music, but instead was spent to get “download passes” at Megaupload is also a distortion of the value proposition?

Really, the money doesn’t go away, it goes different directions. The “value proposition” isn’t the same as economic activity which remains the same.

Anonymous Coward says:

Re: Re: Re: Re:

“You are correct. That money is still in the economy. Unfortunately, that money is no longer going into the growth portion of the economy.”

How do you know that? Maybe the money was used to purchase houses out of foreclosure, which in turn boosts the economy. The point is the money is removed from the market and burned in a furnace as fuel, it recycles in other places.

Okay, I’ll take a stab at this even though I’ve never taken an economics course in my life. It’s rather simple, really, and comes down you to ignoring a key phrase: growth portion>.

Simply put, money paid to defend against patent trolls is money that is no longer being turned back into innovation. The next big thing could be killed off just because the research money has been spent killing off a bad patent or defending where no real infringement has occurred. You, however, simply ignore that and plow on as if you understand what is going on, while showing your total ignorance of the issue.

Next time, at least take the time to read what others have said to you instead of just saying ‘Nuh uh!’

tqk says:

Re: Poking figurative sticks in random strangers' eyes.

“As he points out, patent trolls have cost the US economy significantly more than terrorist attacks.”

He was doing good until this statement. Mike, you have said yourself that money out of one part of the economy (say people not buying music) really doesn’t hurt the economy because the money gets used for something else. In this case, the lawyers get paid, they pay their rent, they pay their employees, and so on. The economy isn’t “hurt” as it’s a neutral thing. The money goes to A or B.

It might be more correct to say that SOME companies have suffered individual impact by having to pay these things. But the economy as a whole? It’s still there, still intact.

First, would you rather have your hard earned cash support someone like Johann Sebastian Bach or Britney Spears? You see no difference between i) paying someone for something you want and ii) simply throwing money into a fire?

Second, this never ceases to amaze me. From time to time, Mike’s posted interesting comments wrt ACs and their behaviour, with which I generally agree. Some of them do use their anonymity for good, and we should welcome their efforts.

Then there’s stuff like this. It’s 7:34 AM, you roll out of bed (trying desperately to not wake up wifey, ’cause $deity knows you don’t want to listen to her at this time of day), pour a cup of coffee, scratch a few itches, fire up the computer and web browser, then head off to TD …, and post that. Why? Well, you’d rather be poking sticks in random strangers’ eyes, but that’s illegal and might get you beaten up, so this’s the next best thing.

What did it add to the sum of human existence? Nothing. Why bother? Because Mike has this web forum thingy that lets you. And it beats getting poked in the eye with a stick.

You have nothing better to do but poke people in the eye at 7:34 in the morning for no discernable reason?

[Wow, is TD slow this AM!]

Anonymous Coward says:

Re: Re: Poking figurative sticks in random strangers' eyes.

Your assumption is that I got up at that time. Would it cause your brain any harm to consider (a) people have a different schedule than you and (b) people live in different time zones?

Keep it up, Mike might offer you a job to replace Marcus and his crap.

Ratfink says:

Re: Re:

Using that logic acts of terror have cost the economy little as it merely shifted money around.

However it is never that simple. Patent trolls do far more then just shift income into their coffers from another company. They push risk into the system making it harder for small companies to gain funding or develop products and solutions in a litigious landscape. Hindering the creating of small business can lead to economic stagnation. Investors will not put their money into a stagnant economy and focus them elsewhere even if it’s outside of their country’s boarders.

asd says:

Re: Re:

When small businesses are getting hit REGULARLY by these trolls, and the effect trickling down being that people are much more hesitant to even start small businesses in tech fields… that is very real damage to the economy, no matter who the cash flows to. The economy is healthier when competition thrives, not when it is stifled.

John Fenderson (profile) says:

Re: Re:

Actually, I think you’re correct to a point. At the same point, terrorist attacks (or any disaster) also have some positive economic effects.

But the real question is how does the equation work out as a whole? With patent trolls & disasters, they generate a short-term economic benefit, but have a longer-term cost in loss of overall productivity.

It’s hard to compare the factors because they have such dramatically different timescales, but my gut tells me that patent trolls and disasters cost us economically when it all comes out in the wash.

Richard (profile) says:

Re:

Okay, now then, can you explain to Mike why money that would have been spent on music, but instead was spent to get “download passes” at Megaupload is also a distortion of the value proposition?

No – because it isn’t – for several reasons:

1) Megaupload was sending money to musicians anyway – and was setting up to do more of that.

2) Your assumption that the money “would have been spent on music” is not supportable. You do not know how the money would have been spent. The transfer you note is between money spent directly on media and money spent on technological infrastructure supporting that media. History teaches that money spent on infrastructure always leads to more money being spent on media in the long run.

3) In the patent troll case we are talking about money actually being taken from one party and given to another. In the situation you describe there is no such transfer – it’s like the difference between robbing the till of a shop and merely choosing not to buy something there.

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