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Red Hat CEO On Patent Trolls: Just Pay Them Off

Posted by timothy on from the take-this-cash-and-shove-it dept.

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."

8 of 167 comments (clear)

  1. This is by Colourspace · · Score: 4, Insightful

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

    1. Re:This is by betterunixthanunix · · Score: 4, Insightful

      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.

      --
      Palm trees and 8
    2. Re:This is by sqlrob · · Score: 5, Informative

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

    3. Re:This is by increment1 · · Score: 4, Insightful

      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.

    4. Re:This is by Firethorn · · Score: 5, Interesting

      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.

      --
      I don't read AC A human right
  2. Is this the elusive Step 2? by joebok · · Score: 5, Funny

    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

  3. The real harm's individuals and SMEs by ciaran_o_riordan · · Score: 5, Informative

    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

    --
    Expert in software patents or patent law? Contribute to the ESP wiki!
  4. Rudyard Kipling said it best by Oriumpor · · Score: 4, Insightful

    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!"