Why Red Hat Is Wrong That It's Better To Just Pay Patent Trolls Sometimes

from the that's-why-you-get-more dept

Last year, people got reasonably upset when it came out that Red Hat had settled one of many patent lawsuits filed against it, this time from patent troll giant Acacia. People were upset both at the decision to settle and then to keep the terms secret. Red Hat, after all, has spoken out many times against software patents and patent trolls. Slashdot points us to the news that Red Hat's CEO has explained that sometimes it's just easier to pay up. It's clear that he really doesn't want to and thinks the whole practice is distasteful, but there are times when he recognizes it's just cheaper to pay up:
"When it's so little money, at some point, bluntly, it's better to settle than fight these things out."
He does say that they fight on bigger cases or cases they feel are especially ridiculous. But, in others, it's just cheaper and easier to settle. I certainly understand the reasoning. And I definitely understand the short-term cost-benefit analysis. If you can pay off the patent holder for less than it'll take to fight the case, even if you win, that seems like a good deal. Except... in the long run, this may be penny-wise and pound-foolish, because as you build up the reputation as a company who will fold as long as the settlement demands are under a certain level, then all you do is encourage more trolling behavior, leading to more new lawsuits with more patent holders demanding a handout.

Again, I can certainly understand the basic reasoning for settling, and can't really begrudge any company that decides to settle to avoid a lawsuit, but it is a little disappointing that this just perpetuates the problem.
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Filed Under: patent trolls, patents, settlements
Companies: red hat


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  1. icon
    freak (profile), 6 May 2011 @ 2:26pm

    Re: RedHat's strategy can be reasonable

    I'm not sure what you're saying either; Mind if I try re-wording it to see if I have it right?

    Red Hat will not exist infinitely; Even assuming that to be true, the patent system will eventually change and the problem will shift/fail to be significant at some point in the future.

    On an infinite timeline, discouraging trolls, (and all others), is always profitable, no matter the short-term cost.

    On a finite timeline, the cost and strength of each lawsuit could be weighed to produce a threshold above which it is worthwhile to fight, and below which, the lifetime cost of the lawsuits will likely fall beneath the short-term more expensive cost of fighting and thus discouraging them permanently.

    (This is assuming troll lawsuits).

    The threshold is further raised because if the money is, instead of fighting, spent developing new software & techniques, there will be less 'strong' lawsuits in the first place.

    Is this the gist of what you were saying?

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