Red Hat CEO On Patent Trolls: Just Pay Them Off

jbrodkin writes "Although Red Hat fights patent lawsuits when it deems it necessary, CEO Jim Whitehurst says it's often just better to pay the trolls to make them go away. 'When it's so little money, at some point, bluntly, it's better to settle than fight these things out,' Whitehurst said. Red Hat has been forced to pay out claims to the likes of FireStar Software and Acacia, and Whitehurst indicated Red Hat has paid off various other companies behind closed doors. 'Some of them are [public] but we often seal them in settlement,' he said."

Comments

This is

[Colourspace]

The stupidest thing I have heard a CEO say in a long time. Welcome trolls, we'll pay you to shut the fuck up.

Re:This is

[betterunixthanunix]

His job is to maximize shareholder value. If that means settling for a lower price than the cost of pursuing a court case, that is what he is going to do.

Re:This is

[sqlrob]

He just told trolls "Come and get it!", how is that maximizing value?

Re:This is

[jimpop]

Exactly! That same strategy failed with other leeches, like panhandlers.

Re:This is

[jimpop]

That only works the first few times. Once you become known as an ATM, the trolls will form a long line.

Re:This is

[bloodhawk]

Patent trolls like easy targets, As the CEO he has just announced that he will bend over for any patent troll as long as they aren't to greedy and only ram their fist in up to the elbow. Their is no possible way this can be explained as maximising value as every patent troll will now have Redhat at the top of their lists for viable targets as potential cash cow.

Re:This is

[biek]

You gotta pay the troll toll

Re:This is

[The Dawn Of Time]

It's entirely possible that he, as the CEO, understands that his company is indeed in violation of these patents and sees this as a cheaper solution than trying to rewrite 200 years of law or fight a battle he knows he will lose.

I don't know for certain, of course. I'm no more privy to his thought process than you are.

Re:This is

[rudy_wayne]

His job is to maximize shareholder value.

Paying out extortion money, which guarantees that there will be more extortion demands in the future, does absolutely nothing to maximize shareholder value. Also, what amount of dividends does Redhat pay to it's stockholders? Answer -- zero. So much for "shareholder value".

Re:This is

[Colourspace]

Yes, but you don't say it out loud. Personally I think Spotify is worth double the monthly amount. Ooooooops....

Re:This is

[JaredOfEuropa]

Sure, and in the process he opens up his company and others for more trolling, meanwhile fattening the troll's war chest. Just like it's cheaper to pay off Guido instead of having him and his pal Vinnie come over to bust up your warehouse. In both cases, paying up might be the prudent choice, but it's still sad that these bullies get away with it.

Re:This is

[Nerdfest]

The job of a CEO these days is to maximize profits *while he's CEO*. People seem to have completely lost sight of any long term vision.

Re:This is

[jedidiah]

As much as we might like this guy to play the role of Don Quixote, it just doesn't work out that way in real life.

That's why we need guys like RMS.

Re:This is

[jimicus]

He may not be CEO for very long if he makes a habit of making announcements like this.

Re:This is

[DdJ]

It's not necessarily stupid for this to be their policy.

It may be stupid for them to admit this policy, if the main result is that patent trolls crawl out of the woodwork.

However, it may not be stupid for them to admit this policy, if the main result is for the shareholders to direct them to no longer follow this policy even if the consequence is lower short-term profits. Or perhaps for them to direct "stop sealing the documents when you do this, so we can evaluate the choices made".

It also may not be stupid if the main result is for policymakers and courts to be more aware of the problem than they had been, and "fix" it (the way Righthaven has been getting fixed).

Re:This is

[MoonBuggy]

It's pretty much impossible to know that one is in violation of a software patent in a meaningful way, since most challenges don't revolve around "Our product doesn't come under those criteria", but instead go for "The patent is invalid and should never have been granted". The latter depends on subjective criteria like obviousness, which means going to court is a gamble every time - the policy to sometimes feed the trolls is probably just the product of a bit of statistical analysis on the outcomes of similar court cases.

Re:This is

[Red Storm]

>His job is to maximize shareholder value. If that means settling for a lower price than the cost of pursuing a court case, that is what he is going to do.

f I had the points I'd mod your post up. :-)

You actually understand what is going on better than most people responding to this thread. It comes down to simple economics. If you can pay someone to shut up (and perhaps get a license for Open Source in general) for a fraction of what it would cost to have your legal team peruse it then it makes more sense to pay them the hush money than waste your legal team's efforts. In addition if you loose on a small fry the potential ramifications are huge as they ripple through the rest of of the patent system, which in part is built upon previous cases. Rather it makes much more sense to be strategic in dealing with those who are trolling.

Re:This is

[Svartalf]

All you're doing is paying economic terrorists off. You'll never be rid of them unless you deep-six them. I'd have thought the SCOX debacle would've taught them that lesson- but apparently not.

Re:This is

[increment1]

That is not the point that the original poster is referring to. What is being referred to is that if you pay off trolls, you probably shouldn't announce that you pay off trolls, or you will end up with more trolls coming at you.

This is why the comment by the CEO is being referred to as stupid, since saying something like this can only lead to more patent trolls and nothing positive for the company.

Re:This is

[Anonymous Cowpat]

Maybe he's actually got a conscience, and this is his way of forcing his shareholders hand(s) into letting him start throwing Redhat's weight around in the general direction of patent trolls. If he becomes an 'easy target' he'll have to start fighting every case.
Also, it's really hard for shareholders to actually go after the board for not making them maximum money.

Finally, who are Redhat's main shareholders? maybe they're people who would rather see their investment not do so well in exchange for beating the trolls up a bit.

Re:This is

[Svartalf]

Heh... That's opposite thinking. When you "settle" with these jokers, it's typically a friggin' dogpile on you over time- they know you'll pay out so they'll come with their hands out and threatening to sue them. LOTS of them.

Hardly "maximizing shareholder value", now is it?

Re:This is

[Twinbee]

Only to those cases where there's a a hint of honest IP defense. Standard troll crap gets fought (and presumably thrown out). I quote:

"When we feel like people are really abusing the patent regimen, and we have a good case that the patent is invalid, that it should never have been issued, it's not a patentable thing, or there's a lot of prior art, then we fight those out," Whitehurst said during an interview with Network World at this week's Red Hat Summit in Boston.

Re:This is

[Chris Mattern]

Paying trolls to go away may or may not be a wise strategy (personally, I'd be against it--once you've paid him the Danegeld, you never get rid of the Dane). *Announcing to the world* that you'll pay trolls to go away is beyond stupid.

Re:This is

[The Dawn Of Time]

Well... yes and no. It can lead to patent violation claims. The "troll" designation is just an attempt to frame the debate (which clearly both sides are guilty of doing.)

I know I'm on the wrong site trying to evaluate this objectively, so I won't really go any further.

Re:This is

[larry bagina]

It helps them out by creating another barrier to entry. If Red Hat is "infringing" on a patent, then so is every other linux distro and everybody using linux. But not everyone has the money to pay them off. If using CentOS makes you a target for patent troll lawsuits but Red Hat grants you immunity, Red Hat gets the sale.

Re:This is

[budgenator]

Makes you wonder what SEAL Team 6 would charge to neutralize a patent troll case. I'm seriously surprised that people have not just disappeared over some of this silly bullshit.

Re:This is

[grantek]

This is why the comment by the CEO is being referred to as stupid, since saying something like this can only lead to more patent trolls and nothing positive for the company.

Unless the REAL strategy is to patent-troll-troll, whereby the most profitable strategy is to attract trolls, get sued by them, then win and counter-sue for damages :)

Re:This is

[d'fim]

He just told trolls "Come and get it!", how is that maximizing value?

It isn't.

The strategy was smart; announcing it to the world was stupid.

Re:This is

[Firethorn]

This sort of thinking is what led to the lawsuit-crazy period in the '90s. People would find some 'standing' to sue, pretty much irregardless of merit. Then they'd offer to settle for some fraction of the court costs (like $500). The accountants did the make, figuring it'd cost $5k to win the court case, but only $500 to make them go away.

HOWEVER, if you get a reputation for paying off, you attract MORE trolls. This would be known as a 'second order effect'. IE if you don't have a rep for settling, you might get sued once a year. Get a rep for settling, and you might get 100.

1x $5k is cheaper than 100x $500.

So settling with a patent troll may be, on first glance, cheaper. But if it results in more patent trolls threatening to sue you, the overall expense can actually flip.

It's this sort of reasoning behind why Walmart and a number of other companies will fight ANY settlement tooth and nail. It's to have a tough-guy rep to prevent others from suing in the first place.

Re:This is

[eviljolly]

I have to agree. This is something you are supposed to think, but not say. Once you lose your intimidation factor, more people are likely to attack.

Re:This is

[nedlohs]

You don't maximise shareholder value by announcing to the world that anyone with a patent should go after your company, since you'll just pay them off. It's like handing out free money.

Paying them off is fine. Announcing to the world that you do so, that's not so smart.

Re:This is

[martin-boundary]

Hey, if he wants to pay trolls, how about offering to pay every time a small independent open source programmer gets trolled? It's so little money, RH should offer to protect the entire OS community!

Re:This is

[migla]

>The stupidest thing I have heard a CEO say in a long time. Welcome trolls, we'll pay you to shut the fuck up.

It does seem that way. For the sake of wondering about it, let's pretend he knew what he was saying and said it on purpose. Could there come any benefit from telling the truth like this?

Re:This is

[publiclurker]

The job of a CEO these days is to maximize HIS PERSONAL profits *while he's CEO*. People seem to have completely lost sight of any long term vision. FTFY

Re:This is

[blair1q]

At least until the company fires its CEO or its Consigliere.

Both of whom, in this case, probably deserve a long, hard look from the board.

Re:This is

[JonJ]

Yeah, the actual method is a good strategy, but I would not *ANNOUNCE* the strategy

Yes, this is clearly something the patent trolls wouldn't find out unless he told them.

Re:This is

[nomadic]

"This sort of thinking is what led to the lawsuit-crazy period in the '90s. "

Huh?? Do you have some evidence that lawsuits were more prevalent in the '90s as opposed to the '80s or '00s?

Re:This is

[robot256]

"This sort of thinking is what led to the lawsuit-crazy period in the '90s. " Huh?? Do you have some evidence that lawsuits were more prevalent in the '90s as opposed to the '80s or '00s?

It led to the beginning of it in the '90s. The period itself has not ended.

Re:This is

[Surt]

He's thinking with a short time horizon, as most bad CEOs do. In the long run, having every patent troll know they will go bankrupt fighting you in court will reduce your long-run costs to zero.

Re:This is

[Caerdwyn]

Unlike individual contributors, who work for free because it's the "right thing to do", and who exhibit amazing long-term planning?

Re:This is

[JumpDrive]

no announcing it to the world was smart. It is the first step in ending this crap.

It tells more people what the heck is going on.

Along with patent trolls there are copyright trolls and the first step to bringing it to an end is to start telling the general public about it. He has the lawyers. If he gets a bunch of patent trolls it will make for a bigger and better article the next time.

The ones who are trolling already know that companies such as Red Hat are fair game. It's not news to them. But apparently it is news to people like you.

So your answer is to stay in a dark corner and hope they don't find you? Once they have found you , the best course of action is to start telling people as loudly and as often as you can.

As for maximizing value, he has probably realized that they are continually opening up and sucking the companies blood. You can continue to bleed or look for help. The legal system is for shit in this situation, so you have to start looking for other solutions.

Re:This is

[hedwards]

IIRC this is precisely why IBM doesn't settle patent suits ever. If they want their money they're going to have to prove in court that they have the goods. Granted, IBM has a huge patent portfolio and deep pockets, whereas Redhat is much less safe, but by publicly stating that they generally just pay all that's going to do is make them an even more attractive target.

This is sort of like why the US typically doesn't negotiate with terrorists or pay ransom demands we really don't want to give those sorts of people the impression that we'll give in.

Re:This is

[hedwards]

That would be stupid. A move like this is mind blowingly stupid. He can explain why he's fighting suits rather than settling at the next shareholders' meeting if need be, making an announcement like this takes the matter completely off the table because now their going to have even more patent trolls trying to bleed them dry.

Re:This is

[hedwards]

Tolls are tolls and rolls are rolls and if I don't get no tolls then I don't eat no rolls.

Re:This is

[hedwards]

I'm pretty sure that this is a common policy. Apart from large corporations like IBM that have the pockets and patents to stand up to trolls, many companies just don't have the resources to fight it. Which is a lot like birds at the park, you might not be feeding the birds, but there's enough idiots that do feed the birds that you still end up dealing with the begging anyways.

Re:This is

[Anonymous Coward]

irregardless of merit

Did you mean REGARDLESS of merit? Your high school English teacher must be proud...

Re:This is

[cartman]

HOWEVER, if you get a reputation for paying off, you attract MORE trolls. This would be known as a 'second order effect'. IE if you don't have a rep for settling, you might get sued once a year. Get a rep for settling, and you might get 100.

Your claim is that paying trolls will encourage them and so will lose more money in the long run. This opinion is what basically everyone here says. The subsequent comments basically all agree with you on this point.

I'm faily certain this claim is mistaken. Bear in mind that if you don't pay trolls and say "we'll never pay trolls," then you'll be taken to court and will lose some fraction of the time, say 10%. (I know this because I've recently reviewed patent troll lawsuits when settlement is refused, and the troll lawsuits are successful about 10% of the time). Now assume two companies, one which routinely pays trolls 10% of the settlement amount, and another which never pays them and loses 10% of the time, and must pay 10x the settlement amount once every 10 times. In both cases the patent troll makes the same amount of money and couldn't care less what the CEO says.

The only way trolls would have an incentive to sue you, is if you settle for too much; i.e., more than the average of what they would recover through lawsuits minus legal costs. However, if you offer too little as a settlement (or nothing at all) then you get sued and lose more on average, because you must pay the rational settlement amount (which is average amount that the lawsuit would recover) plus legal fees. The trick is to know how likely a particular patent lawsuit is to succeed. Just saying "we'll never settle" won't discourage anyone, because they can always sue you and try to get money, whether you settle or not.

This is nothing like a schoolyard bully who will be incentivized to attack you, if you pay. In that case, paying the bully (settling) is the only way the bully can get any money, so he will go after only those who settle. In this case, however, the bully can get your money anyway, through a court system, even if you don't settle.

If the court system never paid out on frivolous claims (not even 10% of the time), then you should never settle. In that case, nobody would settle because everyone would have figured that out by now.

The patent troll will assume that all companies will pay when doing so is less expensive than going to court, because the trolls correctly assume that it's rational behavior.

There is also another claim made in various comments here, as follows. By making public comments, the CEO will "draw attention" from trolls. This claim also seems incorrect. Trolls do research on which products could possibly violate their patent portfolio. Trolls will sue all companies when the payout will likely exceed the legal costs, regardless of what the CEO has said. In no way will CEO comments "draw attention" of patent trolls. Again, this is not like a schoolyard bully. Whereas the schoolyard bully might not see you if you remain silent, these companies have $100bn in revenues and cannot remain unnoticed. Patent trolls pay researchers to look into all public companies. Patent trolls have heard of companies like Microsoft or Red Hat, even if their CEOs remain silent.

Re:This is

[Firethorn]

Doing actual research, no, lawsuits didn't really go up. Matter of fact, suits by individuals are decreasing.

Still, remember my point - the troll doesn't want to go to court, because he knows he'll lose. He's hoping for a 'shut up and go away' payoff that's less than what it would cost the business to have a lawyer handle their defense.

So, generally speaking, only the very initial steps of starting a lawsuit would be followed. If the business folds and settles, no lawsuit for the records. If they promise to fight, the troll is likely to fold in order to find an easier target. Also no lawsuit appearing in the courts. Only if the troll choses to fight it out, risking his own money, would it appear in the statistics.

And how the heck did 'math' get redone as 'make' in my post?

Re:This is

[Grygus]

I don't understand this attitude. The entire raison d'etre of a patent troll is to get that settlement; if they have a legitimate patent claim that would win in court, then they're not a troll, right? So trolls are hardly going to go after Red Hat more often because of this; they were already coming with everything they had.

Re:This is

[Darinbob]

Because the trolls already know this very well and don't need to be told. It's the general public who might not know this yet.

Re:This is

[zippthorne]

That's kind of a shitty conscience, though, if it requires him to manipulate and force the hands of the shareholders like that....

Re:This is

[aztracker1]

Maybe buying the patents outright, then having a war chest against larger foes?

Re:This is

[aztracker1]

Wish I had mod points.. this should probably been part of TFS.

Re:This is

[publiclurker]

/s I assume, because it may be a surprise to you, but most working employees are not out to screw their employers out of as much as they can as fast as they can

Re:This is

[yuhong]

Personally I think it is not stupid to say it if it actually happens. It doesn't mean it isn't stupid to do it. BTW, on the FireStar patent Sun was able to get it invalidated:
http://lwn.net/Articles/289747/

Re:This is

[randallman]

Integrity be damned! It's just business, right? Doing things because it's the right thing to do is so passé.

This is the same mentality that ships the workforce overseas and in general does things that are bad for the country in the long run. Please stop encouraging spineless behavior.

Re:This is

[Firethorn]

Your claim is that paying trolls will encourage them and so will lose more money in the long run. This opinion is what basically everyone here says. The subsequent comments basically all agree with you on this point.

Awful lot of assumptions here. Remember, I was talking about lawsuit trolls, specifically those without real cases. Patent trolls, on the other hand, have better standing and a better success rate in court.

I'm faily certain this claim is mistaken. Bear in mind that if you don't pay trolls and say "we'll never pay trolls," then you'll be taken to court and will lose some fraction of the time, say 10%. (I know this because I've recently reviewed patent troll lawsuits when settlement is refused, and the troll lawsuits are successful about 10% of the time). Now assume two companies, one which routinely pays trolls 10% of the settlement amount, and another which never pays them and loses 10% of the time, and must pay 10x the settlement amount once every 10 times. In both cases the patent troll makes the same amount of money and couldn't care less what the CEO says.

The point would be that every case would need to be judged on it's own merits. Consider this as well -

Using your numbers - Patent troll sues 10 Companies, they all fold and pay. He now gets 10 units of profit, for minimal cost.
Patent troll sues 10 Companies, they all fight. He spends 10 units of money to do the fight, loses all but 1 case, where he makes 10 units of profit.. He's only made even. The 10 companies also spent 10 units of money on their defense. The lawyers get 20 units of profit, the only ones enriched by this experience.

As such, even though it's twice as expensive for the companies with the occasional failure, it also renders being a patent troll unprofitable on average, due to the legal fees of the lost cases.

Now, each patent case needs to be judged on it's merits. Advantage troll - pay. Advantage company - fight and put the patent troll company in the ground, saving hassle in the future.

Re:This is

[akc]

Unless of course he is playing a double bluff.

Re:This is

[jbolden]

I don't know about that. Once CEOs of computer companies are willing to say publicly that entities called "patent trolls" exist and that they are being paid off, essentially a tax congress or the courts may take action. Microsoft has had it with these guys and is doing the heavy lifting in the fight, I'm glad RedHat is helping.

Re:This is

[jbolden]

What broke the protection rackets was Robert Kennedy's war on the mob. Hopefully CEOs openly admitting they are paying a protection racket will get the Robert Kennedys involved.

Re:This is

[TheRaven64]

The job of a CEO these days is to maximize HIS PERSONAL profits *while he's CEO*

No, the last part of the sentence is not true. His goal is to maximise his personal profits, even after he stops being CEO. This is why intelligent directors structure CEO compensation so that they get a load of shares and can't divest the majority of them until some time after they've stepped down.

Re:This is

[fritsd]

Software patents are 20 years old, that's hardly "200 years of law" or "the dawn of time" ffs.

But it's probably the wisest decision, if you make software larger then "Hello World", like Red Hat, to assume as a legal precaution that your software will infringe on someones sofware patents.

In the USA.

Therefore there are many possible solutions (just a bit limited if you also want to keep your industry or customers in the USA).

Politically, the situation will probably only be resolved once large companies actually leave or refuse to sell their products in countries strewn with patent minefields.

Re:This is

[stewbacca]

So much for principles eh?

Re:This is

[stewbacca]

Ah, just what the discussion needs--another grammar pedant!

Regardless, irrespective, irregardless all mean the same thing (note, irregardless is *generally* considered to be bad form and is *non-standard*, but doesn't mean it's not a word.)

Now I'm fixin' to mosey on o'er yonder before y'all tell me I ain't right.

Re:This is

[fritsd]

"windhandel"

You are assuming that those patents are entities that will exist for a while longer so that they can deliver an increase in value to you.

But what if software patents are abolished next year, then you've just spent your company's fortune on a small pile of toilet paper.

Let me put it this way with a historical analogy: How much would you pay to buy a Semper Augustus tulip bulb?.

There was a year (1636) where it made smart business sense to put *all* of your money into buying tulip bulbs. This was not necessarily true the next year. The bulbs were still the same and still pretty, though... whereas software patents without the "magic" turn into a bunch of overcomplicated legal texts.

Re:This is

[aztracker1]

I would be interested in buying your crystal ball, where you can see the future. Following your logic, I shouldn't buy Pork futures because, what if flying pigs start flying out my ass?

Re:This is

[PCM2]

Of course. The vast majority of civil lawsuits never see trial. Seems as though someone must have thought of this whole "settling" strategy before now.

Re:This is

[WorBlux]

Actually even trying to know is discouraged by the system. Intentional infringement carries greater statutory penalties, so people ignore other peoples software patents so they can prove the infringement wasn't intentional.

Is this the elusive Step 2?

[joebok]

Phase 1: Collect Underpants
Phase 2: Sue Red Hat for an amount not too big, but not too small and get paid to shut up and go away.
Phase 3: Profit

Re:Is this the elusive Step 2?

[wen]

You forgot

Goto Phase 1.

Danegeld, anyone?

[gmfeier]

Didn't work then, doesn't work now.

Re:Danegeld, anyone?

[Svartalf]

No... Whence you pay the Dane his Danegeld, he keeps coming back for more.

Re:Danegeld, anyone?

[c0d3g33k]

Hi AC,

Pedant=A pedant is a person who is excessively concerned with formalism and precision, or who makes a show of their learning.

The real harm's individuals and SMEs

[ciaran_o_riordan]

The discussion of software patents focusses way too much on court cases and big companies.

Companies have all sorts of expenses, and trolls is another. Some companies (particularly big ones) can afford that.

The real harm is when standards are ruined, or whole fiels (ex: video), or when SMEs and small developers are forced to stop distributing their software (or when they don't even start, since they know it would be doomed).

http://en.swpat.org/wiki/More_than_trolls

http://en.swpat.org/wiki/Harm_to_standards_and_compatibility

http://en.swpat.org/wiki/Audio-video_patents

This reminds me

[Haedrian]

Red Hat totally stole my patent on uh paying off patent trolls.

I'll be taking my check now please.

Rudyard Kipling

[Anonymous Coward]

We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that plays it is lost!

Re:Rudyard Kipling

[jopsen]

And the nation that plays it is lost!

Redhat is a company... It's responsibilities is with it shareholders not the public interest of America... That's what you get with capitalism... :)

How do you get this stupid?

[rudy_wayne]

Seriously. Does he really not understand that paying the troll only serves to perpetuate the troll and results in everyone having to continually pay out extortion settlements.

WTF?

Re:How do you get this stupid?

[Anonymous Coward]

I think the point here is that the system is broken, and companies are doing the best they can to live with this harsh reality. How would it be in their best interest to fight everything, no matter what the cost? If it's your job to make money, and feeding the trolls is the lesser of two evils, then you prepare the sacrificial goats and move on with business.

Re:How do you get this stupid?

[Colourspace]

Yes, but as I have said above you don't advertise it

Re:How do you get this stupid?

[Logger]

But once you are a successful company, the troll tax also serves to inhibit startup competitors. There's only one thing corporations hate worse than competition. And that's new competition. Unfortunately the ones who would benefit the most from real patent reform are small independent entrepreneurs and the public at large, and they are unorganized.

Leeches

[MMAfrk19BB]

It's things like this that make legislation against litigious fucks vital to the continued survival of the FOSS community. Maybe if it wasn't such an incredible investment for the soulless bloodsuckers at these low-rent law firms and companies to parasitically claim the work of others while not contributing anything, they wouldn't do it so often. I would be willing to bet that some of the lawyers involved even approach their clients with a "No charge unless we win the case or settle" type of agreement. It's becoming a viable business model, and that has to stop if we want to keep FOSS alive.

Oh, Come On!

[jaskelling]

Or, you could actually have a spine and stand up for what's right. This is the same as companies that determine how much it costs to fix a product versus how much it costs to pay damages to the people it can injure. It's "good" business, but it's cowardly and only hurts everyone in the long run. And someday, it will come back to bite you in the ass. But hey, whatever works for you I guess.

Re:Oh, Come On!

[mlts]

There is choosing one's battles, to keep a company going versus going down like mp3.com.

On one side, there is paying off a troll.

The other side is if a troll managed to get a judge (likely in East Texas) to issue an injunction that no products can be sold, that will cause major revenue loss, even if the case has no merit. Same if the troll got the export regulators to prohibit export/import of the product.

It is a game of poker. How good is the troll's law firm, and how valid their patents would be in the eyes of nontechnical judges are all points of decision of when a company should fold and pay the troll off, versus digging in and doing battle.

It is really a lose/lose thing for RedHat. If they lose the battle, they might go bankrupt. If they win against a patent troll, they gain nada.

Re:Oh, Come On!

[Dachannien]

If they win against a patent troll, they gain nada.

It's actually even worse than that, because even if they win, they'll most likely still be on the hook for their own attorneys' fees.

Re:Oh, Come On!

[Hognoxious]

even if they win, they'll most likely still be on the hook for their own attorneys' fees

Changing that one thing would fix the frivolous/speculative lawsuit culture overnight.

I wonder why somebody hasn't proposed it.

If you give a mouse a cookie......

[Eightbitgnosis]

I understand the fact that sometimes it's much less costly just to pay to have something go away, but patent trolls thrive on anything that validates them. I believe they'll just ask for more from someone else along the way

just business

[Adayse]

so he says that sometimes you should just settle so that when he fights he seems more reasonable..

The longstanding wisdom of the net applies here:

[idontgno]

Don't feed the trolls.

Please be more specific Whitehurst

[frovingslosh]

Jim Whitehurst, please give details. What is your cut-off point below which, if I were to make a merit-less claim, that you would just pay me to go away rather than bother to involve the lawyers?

Re:Please be more specific Whitehurst

[publiclurker]

I'd like to know too. I need a new car and want to know if I should ask them a Ford or a BMW worth of a claim.

4Chan Lawyers

[TemperedAlchemist]

Hasn't he learned not the feed the trolls? I figure if you ignore their existence long enough they'll get bored and go away. And by ignore their existence I mean flat out ignore that they're suing you.

Brilliant.

[blind biker]

Overheard in office at PatentTrolls Inc:

TrollA: "Looks like Microsoft is kinda sorta infringing on one of our innovative patents haha!"
TrollB: "Yeah, but they got lots of cash and rabid lawyers. And a reputation of fighting back."
TrollA: "And Google..."
TrollB: "Those are even worse."
TrollA: "Well, there's always Redhat for a quicky"
TrollB: "Yeah, let's do Redhat. Also known as Open Legs, hahah!"

Re:Change legal system: loser pays all

[rudy_wayne]

And really, we should change our legal system such that the losing party pays all costs.

Sure. Right On!!

Because in every legal case the person who is right always wins and evil scumbags with lots of money always lose.

So Redhat

[imric]

has a policy of making deals with (economic) terrorists.

Great.

Rudyard Kipling said it best

[Oriumpor]

It is always a temptation to an armed and agile nation
    To call upon a neighbour and to say: --
"We invaded you last night--we are quite prepared to fight,
    Unless you pay us cash to go away."

And that is called asking for Dane-geld,
    And the people who ask it explain
That you've only to pay 'em the Dane-geld
    And then you'll get rid of the Dane!

It is always a temptation for a rich and lazy nation,
    To puff and look important and to say: --
"Though we know we should defeat you, we have not the time to meet you.
    We will therefore pay you cash to go away."

And that is called paying the Dane-geld;
    But we've proved it again and again,
That if once you have paid him the Dane-geld
    You never get rid of the Dane.

It is wrong to put temptation in the path of any nation,
    For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
    You will find it better policy to say: --

"We never pay any-one Dane-geld,
    No matter how trifling the cost;
For the end of that game is oppression and shame,
    And the nation that pays it is lost!"

Re:Rudyard Kipling said it best

[nEoN nOoDlE]

That was a fairly round-about way of saying "We don't negotiate with terrorists."

Re:Rudyard Kipling said it best

[russotto]

Before there was Kipling, before there was "We don't negotiate with terrorists.", there was "Millions for defense, not one cent for tribute." (US Rep. Robert Goodloe Harper, in 1798). I'm sure the idea is older than that.

nt

[shentino]

Paying a patent troll to go away is like paying a ransom to kidnappers.

All it does is ring the dinner bell and attract more sharks.

It's a pyramid scheme

[Weezul]

I'd imagine he'd happily attract the trolls early to negotiate a pyramid scheme settlement, i.e. ReadHat will publicly pay but RedHat takes a cut from any future settlements by other victims.

Kipling: Dane-geld

[Anonymous Coward]

Dane-Geld
A.D. 980-1016
Rudyard Kipling

It is always a temptation to an armed and agile nation
    To call upon a neighbour and to say: --
"We invaded you last night--we are quite prepared to fight,
    Unless you pay us cash to go away."

And that is called asking for Dane-geld,
    And the people who ask it explain
That you've only to pay 'em the Dane-geld
    And then you'll get rid of the Dane!

It is always a temptation for a rich and lazy nation,
    To puff and look important and to say: --
"Though we know we should defeat you, we have not the time to meet you.
    We will therefore pay you cash to go away."

And that is called paying the Dane-geld;
    But we've proved it again and again,
That if once you have paid him the Dane-geld
    You never get rid of the Dane.

It is wrong to put temptation in the path of any nation,
    For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
    You will find it better policy to say: --

"We never pay any-one Dane-geld,
    No matter how trifling the cost;
For the end of that game is oppression and shame,
    And the nation that pays it is lost!"

======
Danegeld
Rudyard Kipling

Yes this is probably a blatant copyvio so here's a link to the poem in case the Scientologists decide Kipling was one of them:

"Dane Geld" by Rudyard Kipling

Attn: Redhat

[loxosceles]

Mr. Whitehurst, CEO, Redhat, Inc:

You are infringing on my client's patent 2938562906716 relating to a method by which CEOs can maximize shareholder value by settling frivolous patent lawsuits for less than the cost of a full legal defense.

We are prepared prepared to defend our patent all the way to the Supreme Court if necessary.

My client wishes to advise you that in order to settle this lawsuit, you will have to pay an additional $500,000 in royalties for using his patent.

I trust we will be receiving a check from you soon.

Yours,
Slimy Lawyer, Esq.

The trolls will come anyway

[rsilvergun]

he's just letting them know it's not worth litigating, because he'll settle for reasonable amount. These are all businessmen...

Re:The trolls will come anyway

[TheRaven64]

What is a reasonable amount? It costs $100 to file a patent and under $50 to set up a company. If Red Hat will settle patent suits for under $1,000, then it's a good business strategy to file thousands of spurious patents (you don't even have to get them all of the way through, you can drop them after you have done the extortion), set up a shell company for each one, and send Red Hat a C&D letter. You probably get about a 100% ROI from each patent. If it's $10K, then you can put a bit more effort into working out what they're infringing (don't worry about prior art, just look at something Red Hat does, patent it, and drop the patent having 'just discovered some prior art' after they pay up).

Re:That's why they exist in the first place

[nomadic]

You're assuming all patent trolls have frivolous claims. A patent troll is someone who just basically bought the right to sue from the patentholder. The original claim might be valid.

I use the same thing with homeless people

[Nyder]

I figure, it's only a dollar, it's not much.

But then, the next day, dude was there, begging for money again.

So what the hell, i give him another dollar.

Now he's camped out on my door, asking for money every time i go out.

When will it stop?

(for the record, I don't give homeless shit. This is why you don't give homeless money, nor do you give trolls.)

Re:That's why they exist in the first place

[Surt]

I, and I think most people, don't consider a company holding a valid claim to be a troll. To be a troll requires that the claim be frivolous by definition.

Possible GPL Violation?

[Nick Ives]

My understanding is that the GPL carries with it patent licenses. Red Hat can't license patents for just its own customers.

Reading section 11 of GPLv3 and section 7 of GPLv2 it seems fairly clear that unless Red Hat is licensing for all downstream recipients (which would essentially mean the entire GPL ecosystem, as anyone who wants a particular patent license would just have to make a derivative from the Red Hat code) they can't distribute.

Re:Possible GPL Violation?

[Nick Ives]

In order to distribute patented GPL software you have to provide full indemnity to all downstream recipients from any litigation. If Red Hat has reached a patent settlement and thereby acquired a license from a patent troll, that license has to indemnify all downstream recipients otherwise Red Hat themselves become in breach of the GPL.

I'm amazed nobody else on /. has picked up on this. I guess place really is in the doldrums...

lawsuit crazy

[Firethorn]

Yeah, the beginnings were pretty much in the '90s. Maybe late '80s. I was pretty young then. I'll fully admit that crazy lawsuits still happen, but I'd say that they're off of their 'peak' because many companies, such as Walmart, have worked very hard to NOT be seen as a target. Yes, Walmart still gets sued a lot, but remember it's size.

Re:lawsuit crazy

[PCM2]

many companies, such as Walmart, have worked very hard to NOT be seen as a target.

And, ironically, Target has worked very hard not to be seen as a Walmart.

Re:A Legal System That Supports Blackmail

[jc42]

People are using the wrong metaphor here. What's going on is known as a "protection racket". That term applies whenever you can just pay them off to prevent an attack.

Of course, in the business/legal world, they're not as honest about it as the criminal gangs are. With your local crime boss, once you've paid him off, he (or his people) will actively prevent others from hitting you up for the same "protection". But in the business and legal arenas, they don't do this; they just take your money and walk away. So you can be hit up for payoffs by as many people as can find you and make a credible threat.

patent trolls and RedHat

[Politimemes]

the anonymous coward comment was me. I didn't realise I wasn't logged in.

paten trolls and RedHat

[Politimemes]

[Resubmitting] Settling is the worst thing to do if the patent is bogus. You become a target for others, and you bankroll the troll to go after others. I was involved in an infringement case. The troll had scammed the PTO into granting a patent that allegedly covered technology I had developed some years earlier. They claimed infringment against my employer's product which used my technology. The legal case was mishandled and we lost at trial. Years went by with appeal, and a limited retrial was scheduled. Meanwhile we wrangled with the PTO over invalidating the patent. They did not want to make a decision. Finally, when the retrial date was imminent, we were on the verge of invalidating the patent. The company decided that given the limitations on the retrial, it would be better to settle. The settlement was 10% of what they had been demanding, presumably because of the likely invalidation. As part of the settlement, the company agreed to withdraw the interference. I hated the settlement, but it wasn't my decision. The troll now still has a bogus patent and is suing a whole lot of tech companies.

the problem is, he cannot.

[robbak]

... And this is the big problem here. CEOs have the sole responsibility of overeating value. If it is not illegal, and it increases value, he is obliged to do it. If the right thing to do costs value, then the ceo can be personally sued. Even imprisoned.

The trolls work for Red Hat, in a way

[wytcld]

It's one thing when firms are small and can't afford the struggle. Red Hat's profits are extraordinary. They can afford a zero tolerance attitude towards the trolls who steal freedom from all. In paying them off, they leave the trolls as a barrier to business for smaller players who - gasp - might compete with Red Hat in some small area. Thus Red Hat is buying protection not just from direct harm by trolls, but from competition by legitimate businesses who the Red Hat-enriched trolls can now afford to go after.

This is why, despite some of Red Hat's technology and people being quite fine, I'll never encourage my clients to buy their licenses. CentOS, yes. The stuff is well worth using. But if you pay Red Hat you're paying a tax to the trolls, who will fatten up on it and then come after other open software that really matters to us.

I heard the CEO was singing...

[abednegoyulo]

It's not about the money, money, money,
We don't need your money, money, money.
We just wanna make the shareholder dance,
Forget about the price tag.
Ain't about the (ha!) cha-ching cha-ching.
Ain't about the (yeah!) ba-bling ba-bling,
Wanna make the shareholder dance,
Forget about the price tag.

3 Steps Ahead?

[bill_mcgonigle]

Heh... That's opposite thinking. When you "settle" with these jokers, it's typically a friggin' dogpile on you over time- they know you'll pay out so they'll come with their hands out and threatening to sue them. LOTS of them.

Hardly "maximizing shareholder value", now is it?

Well, if it attracts hundreds or thousands of small-dollar patent gnats to Redhat, they can probably afford to absorb that blow, but they'll also be able to go to Congress and testify, "we currently have 1734 software patent lawsuits in litigation, none of which a dispassionate observer would feel have merit. This is what software patents really do, destroy innovation. It's time to end the practice."

Re:3 Steps Ahead?

[jbolden]

Exactly, this is a political strategy that makes a lot of sense. The industry is unified behind reducing or eliminating software patents. All that's needed now is congressional action.

Re:3 Steps Ahead?

[bill_mcgonigle]

Redhat certainly knows how to chum the water. Let's hope they have a well-sharpened spear gun for the sharks.

Re:The solution is to kill them off!

[Scarletdown]

Don't pay the trolls. Hire a hitman to dispose of them.

It's cheaper, and it benefits everyone!

[Note: this post is sarcasm. Mostly.]

See? There is a magic bullet for this problem. It's called real bullets.

Re:paying off patent trolls

[Alex Belits]

How can the settlement with your company affect anything that a third party (PTO) is supposed to do as a part of its primary responsibilities? And how could it affect the fact that anyone (including you as you personally are not the company they "settled" with) can ask PTO to invalidate the patent again?