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

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

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

Re:This is

[sqlrob]

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

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.