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Tech Companies Swimming In Lawsuits
conq writes "A new survey shows that the tech industry places third after healthcare and energy companies in the number of lawsuits it deals with. It states that an average tech company faces 42 lawsuits currently, more than the insurance industry!" From the article: "An average U.S. technology company currently faces 42 lawsuits vs. 37 lawsuit for an average company. The tech industry places third, after healthcare and energy companies, in the number of lawsuits it deals with ... Needless to say, that's quite expensive. Nearly a third of these companies spend more than 2% of their gross revenue on legal expenses, according to one of the largest surveys of corporate counsel in America."
The firm asked 354 companies in various industries about their top legal concerns.
Which 354 did you ask? There are thousands of tech companies! Define "tech company". Or is this just the 354 you could think of who'd pick up the phone?
That probably has something to do with tech companies having by far the greatest number of in-house attorneys managing litigation - an average of nine per company.
Nine lawyers per tech company - w0w! That's amazing considering that the overwhelming majority of tech companies that I can think of don't even have nine employees. Do you have any idea how many startups there are in California alone? Do six PHDs in a small lab working on, say, the next medical laser breakthrough not count?
Nearly a third of these companies spend more than 2% of their gross revenue on legal expenses
Which companies? What about the other two thirds? Are we supposed to think that 2% is a lot to spend on total legal expenses? What's the distribution?
Olga, your numbers are a crock of shit, and they stinketh. If you're going to give us stats, try starting with something like "of the 100 highest-grossing telecom service companies".
It was explained to me this way when I was researching the cost of medicine in New Zealand versus the USA. "Look mate, we got rid of all the lawyers in the system and can actually afford to provide healthcare to every single one of our citizens as well as many visitors to our country". Perhaps that is a little simplistic, but there is an element of truth to that. I've written before on the number of Ferraris, Lamborghinis, Bentlys and Maybachs! that I've seen in Sarasota, Florida. Apparently, a good number of the class action lawyers for the tobacco settlements live there and in fact, there was one law firm out on the key where I was staying that routinely had the most amazing high dollar automobiles out there. (Ever seen a Mclaren on the street?) That money comes from somewhere.
The reasons for high number of suits in healthcare are somewhat different that that for tech companies lawsuits, which are more dependent upon a broken patent system which allows frivolous patents.
Visit Jonesblog and say hello.
Where users will get together a class action lawsuit for their ipods being too scratchy.
I think that there's a much larger problem then tech companies facing 42.
NOW! we know the question!
My favorite tech company lawsuit being the CEO of Savvis, from which I was laid off from. This news made my Friday. Jerk.
How many lawsuits does a tech company face?
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Get free domains here
The answer is 42. I could have told you that without even knowing the question!
more software patents. That will solve almost all legal woes with clear cut lines of IP ownership.
With the energy company, it's them you sue when you disconnected the gas stove youself, instead of calling them and your house blows up as a result. With tech companies, it's nothing new, Borroughs used to get sued all the time for misrepresenting their products.
A feeling of having made the same mistake before: Deja Foobar
http://www.msnbc.msn.com/id/9645594/
Yes, I do realize the source is from M$NBC...
She sued a tech firm after she spilled GTA "Hot Coffee" in her laptop.
It's called the Lawyer Tax. Attorneys get their cut of everything, good or bad, for seeing to it that you're protected against greedy, unethical people who are only too happy to make it your fault that something they did blew up on them.
Of course, Microsoft's many faults do very little to help. To be fair, if it wasn't them, it would probably be somebody else.
A feeling of having made the same mistake before: Deja Foobar
I'm dropping out of my Computer Engineering major and going to law school.
I read Slashdot for the articles
We round up every laywer on the planet & stick them on an island with nothing but the clothes on their back & a hastily written & very outdated constitution. Then we film it.
We not only do we get rid of our growing legal problem we also get a nifty reality TV we can watch with all our new found free time not spent in court or legal offices.
Things around /. are really boring without the mother of all tech lawsuits to bandy about, for a good recap and some fun! go here if you are as bored as I am.
How many of these lawsuits involve "Intellectual Property" (copyright / RIAA subpoenas / patents),spamming or spyware?
Just curious.
"Restauranteur" saw a high profile exec and thought he could charge 6-figures for "services" at his strip club, and the exec would be too afraid for his reputation to pay. The implication is that more than exotic dancing went on.
Um, is this Microsoft plus 350 other companies averaging 42 lawsuits apiece? Kind of like the average net worth of the people in a bar going to one billion dollars when Bill Gates walks in?
Remain calm! All is well!
The problem is that society is entering the information age, but society has two models of what kind of age that should be. In one model, all information must be controlled like "intellectual ptoperty" and leveraged for unlimited growth and profit. In the other, all information should flow without restrictions, and money should be made from collaberation, services, customisation, and general things that use information to create value.
These are inherently and fundamentally incompatable. An anti-thesis to each other, and while you can't contoroll information with force - you can certainly attempt to bully, threaten, decieve, and sue - and this is exactly what is happening.
So the suits that are happening now, I'm sure are just barely scratching the surface - as companies on the "intellectual property" side start to loose real money, and real market share, and loose out technology wise to the "freedom is free markets" side. You can be sure they will almost certainly freak, and "pull a SCO" across every industry and every sector.
Also, as a note, a parrallel situation is also happening in the financial markets where industries and government are trying to controll and manipulate information on value and money for unlmited growth and profit too. This is about to explode as well.
So watch out, and go offshore if you can, becasue all freakin hell is about to break loose.
And what else might be done with 2%. An small increase in R&D. Perhaps retail prices would magically decrease 2%. Or drug abuse might marginally increase.
If software companies at a number 3, I think this shows how the entire lawsuit thing has been overblow, and how most of the players are two faced. Even the republican party owes the ambulance chasers. It was they that got all the cig money for texas, which allowed Bush to balance the texas budget while cutting taxes, and helped him get elected to the big house. of course he thanked these lawyer by suing them for excessive billing, even though the billing had been agreed to, and they developed these cases with thier own money in the true spirit of entrepenurism, unlike other people we could mention.
The other issue is how many of these are squabbled over IP, and how many are individual get rich quick schemes. I also have no sympathy for the drug companies. Roche is about to make a killing on Tamiflu, probably several billion in the next few years, much of it direct profit from licensing. Will they have to set some of it aside for lawsuit resulting from charges of gauging and the like. Probably. But if they would sell it to certain countries at cut rate, and deduct the good will, they might be able to save the lawyer fees. But they apparently have made the choice.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
My ex wife is a very successful barrister. She's a brilliant, talented woman. Through her I came to know the various subcultures of the legal world. One of the recurring analogies among the lawyers I've known is that they are hired guns. They are the new warrior class.
During WWII a combat soldier, I can't recall his name or rank, noted that among his comrades only a few (~15%) actively engaged in combat and were responsible for most of the damage done to the enemy. Recently on the Discovery channel a U.S. Army Lt.Col. was shown trying to instill a 'killer instinct' in his troops. The show referred to the earlier WWII report that only a few combat soldiers did the actual wounding/killing. The Lt. Col. on the Discovery show said it was like having 85% of librarians illiterate.
Following WWII tribes in New Gunea were introduced to rugby. The tribes took to wearing war gear to the rugby games and rugby substituted for tribal warfare.
Remember the TOS episode where warfare had become virtual and those areas marked as 'hit' had to have it's citizenry report for euthanasia. In real combat losses are not that great in terms of the overall number of combatants. It may be because only a limited number of people are able and willing to kill or be killed. In a world overpopulated with 6 billion the amount of homicidal acts are not that great.
Now with money substitutable for anything, the inclination to combat among individuals and corporate tribes, can be translated into litigation. The amount of litigation might be an index to our willingness to 'kill' oneanother, the more so when money substitutes for one's own blood.
Lawyers are the new esquired warriors. What a horse and armour were to knights and warring lords, a law degree is to the corporate world.
The question arises if, in an evolutionary context, the litiguous 'mortal/capital' combat effects a beneficial path.
One of my favourite authors G. Bateson spoke to... "adversarial systems are notoriously subject to irrelevant determinism. The relative 'strength' of the adversaries is likely to rule the decision regardless of the relative strength of their arguments."
"Academicians are more likely to share each other's toothbrush than each other's nomenclature."
Cohen
There are some folks out there who just can't stand to see others succeed where they fail. So, they find a reason to sue successful companies. Why work hard and take risks when you can just latch on and leach off those do take risks and work hard?
Just on the personal level, I'm involved in a small startup venture. We have three people working here, 2 developers, 1 lawyer, and we also retain an outside counsel as well. We're not facing any lawsuits, and hopefully will never face one. When doing contract work, I'd say we spend more of our time dealing with the client's legal department than with the actual technical specification. Its utterly disgusting.
I have no problem believing this.
I run Technical Video Rental, and I've had - literally - dozens of legal threats over the simple fact that I buy DVDs, then rent them out. Despite the fact that this is deeply settled case law, I've gotten everything from a legal cease-and-desist from one firm's CEO (who has a degree from Harvard Law School and was formerly Chief Counsel of the United States Senate Committee on Labor and Human Resources) to a threat to - ahem - anally rape me (from a guy who think's he's anonymous, because he doesn't know what website logs and IP addrs are).
I spend about $2,000 - $3,000 per month on attorney fees trying to explain to people what the First Sale Doctrine is.
This is money that could be spent growing the business, and delivering more interesting videos to my customers...but it gets squandered because so many folks (a) don't understand what the copyright law says; (b) don't understand that exposure increases sales (see also: MP3s and the RIAA).
Bah.
It'd be nice to spend more time doing business, instead of doing meta-business (lawsuits).
42!
When a number say it all. Lawsuits are the final answer!
SeqBox
... about holding software manufacturers liable for security problems.
This is one area where SCO is waaayy ahead of the average... pffft only 42 lawsuits...
Tripe. Compare with countries where court costs for frivolous litigation are routinely awarded to the defendant. Such awards are rare in the U.S., which I believe is one of the main reasons lawsuits are such a popular business model in the U.S. (plus, of course, the astronomical damages still being awarded).
In most jurisdictions (e.g. Canada), it's fairly common that the defendant is awarded legal costs. The instigators of frivolous or exploratory civil suits have to reimburse those they attacked for lawyer and court costs, on top of any damages.
Lawyers and the lawyer's IT geek.
i mean - there's not going to be anything else to do by that time. If you're not getting sued, the only way to make money will be to sue someone else.
guns kill people like spoons make Rosie O'Donnell fat.
Where's my bloody mod points when I need them...?
My spoon is too big.
More like sinking in lawsuits, maybe. When innovation is replaced with litigation, What other eventual outcome is to be expected?
I purely put the blame on microsoft - they started this whole protecting your ip patent extortion scheme to fight linux.
you never heard the word IP before microsoft started using it in their defense against linux.
that is their only defense too - they can't write better software - so just sue them.
Back in the 90's the law firm of Bill Lerach - Milberg Weiss Bershad Hynes & Lerach sued so many (mostly tecb) companies that his name became a verb. Miss your quarterly earnings, miss a product deadline, and you could count on two things - a stock price drop, and a 'shareholder' class-action suit from Bill Lerach.
Law suits against tech companies were so prevalent in the 90's, that Neal Stephenson made it part of a sub-plot in his brilliant novel 'Cryptonomicon'.
[Insert pithy quote here]
"This document describes the implementation of a simple SMP
Linux kernel extension and how to use this to develop SMP Linux kernels for architectures other than the Intel MP v1.1 architecture for Pentium and 486 processors.
Alan Cox, 1995
The author wishes to thank Caldera Inc. http://www.caldera.com/ whose donation of an ASUS dual Pentium board made this project possible, and Thomas Radke, whose initial work on multiprocessor Linux formed the backbone of this project."
I would say that sco had a great deal to do with starting Linux on the road to server heaven...Somehow they got bit by the Penguins big time trying to shit on Microsoft in the first place. The fact that Al Cox and Thomas Radke had big help from SCO in 1995 is overlooked by many in the Linux community. I think this is why they turned to Microsoft for financial help, the price for that help was all the legal nonsense. Given that Bush has appointed Meyers to the supreme court I would not be at all suprised if in 2007 SCO wins. The sooner Linux is gone the faster Microsoft can gain control over the internet. That is their thinking, and they have the Government behind them. So all and all it is one hell of a good time to become a tech lawyer.
the question to the answer 42 is: How many lawsuites does an average tech company face around the year 2005?
You can't handle the truth.
... SCO ! with 100% of it's revenue spent in lawsuits ! (OK, I'm already outta here...)
Always buy insurance! :)
The beatings will continue until Morale Improves!
Now the dupe is contained in the original post! Save the effort of reposting in a few days, just copy and paste the same text twice for maximum fun and efficiency.
australia has more lawyers per capita than any other country in the world, including america.
Sorry to nitpick, and this is really not an attempting at trolling but...
There is no country named "America".
tmegapscm
http://science.slashdot.org/article.pl?sid=05/10/2 2/047249&tid=14
What the article fails to mention is that most of these lawsuits are business to business. One of the huge fallacies of the tort reform movement is that most lawsuits come from individuals. It is simply not the case. Most lawsuits against a company are from another company. Most companies have more contacts with other businesses than with individuals. A consumer isn't going to sue your company over the $20 that you screwed him out of. However, another business will sue your ass if you fail to take delivery of $10,000 worth of computer parts that you ordered.
I am not saying that there aren't abusive lawsuits by individuals against businesses. They are just few and far between. Nor am I saying that huge class action lawsuits aren't damaging to corporations. Nor am I downplaying the cost for compliance for numerous industry regulations. But for your average business, the owners have more problems coming from vendors rather than their customers.
So, you want to reduce the costs of business litigation? Pass tough laws against companies that abuse the corporate lawsuit system.
What does 1.405006118e+51 have to do with this?
.... are made on up on the spot!
Be sure to remember the Programmers Prayer