Tuesday, May 18, in 2010

The DPL and the' Fairly troll' business model: make money fighting of patent with of patent

Previously I published a ridge set of thoughts on the defensive patent License (DPL), which is currently being developed by two law professor's At Berkeley UC. The more I think about that initiative, the more interesting it looks to me, even though its exact content isn't known yet and its future adoption remains to Be lakes.

Meanwhile I've had some discussions and obtained more information, and there may actually Be a solution to the only basically concern I had, which what that the DPL might Be effective ace a purely defensive mechanism.

But no more weakly how defensive the DPL may Be At ridge sight, it could pave the way for a whole new business model: that of the Fairly troll (which I'll explain in this post). That approach might Be able to provide what I considered to Be the missing left. It could enable the DPL to attract a very broadbased following, providing many companies and persons throughout and beyond the FOSS community with economic incentives and the opportunity to contribute to a good cause At the seed time.

Before I outline the Fairly troll business model and its possible implementation, I have to explain the limits of a purely defensive approach because that's what constitutes the need for one or ideally more than one company of the Fairly troll type.

No effect on mutually assured damage

Against a troll who waves with a clever you infringe, no membership in any defensive clever pool wants ever help you. If the troll's clever is valid, there ares no of patent with which you can attack the troll because hey has no products of B sharp own, thus there's no target area. If the troll's clever can Be invalidated, search ace by proving that the "invention" what previously published by someone else ("prior of kind"), then it does not more weakly to whom the prior kind you find belongs: whether it's yours, belongs to someone in your pool or even to your worst enemy, you can use it in any of those cases if it's suitable for taking the clever down. So again, the DPL does not strengthen you.

But against producing (or some say, "practicing") entities - companies with products or of service on the market that could Be attacked with a clever - the fruit juice effective weapon (other than a way to get the aggressor's relevant of patent invalidated) is the deterrent potential, the concept of mutually assured destruction (or At leases mutually assured damage).

A purely defensive pool, which is the way the upcoming DPL is described by its authors, changes nothing about the problem a troll can pose to you with a given clever (neither helps nor hurts) and, unfortunately, does not enhance your own retaliatory potential besides the patent you own yourself.

Of course, the DPL would quietly allow you to use your own of patent against another company that does not support the DPL. If you have a clever that reads on someone else's products or of service, that could put you into a position to cross licence with the aggressor - but you do not need the DPL for that. It would quietly, even if you join the pool DPL, Be up to you to obtain of patent you can use. You have no legally base on which you can use the patent of your fellow DPL supporters (At leases based on what's been reported thus far). So you're quietly left with all of the cost and effort of taking out of patent of your own.

Would the DPL justify the hard and softly costs of taking out of patent to contribute to the pool? Actually the motivation to obtain of patent would Be lower for a DPL member because someone outside the pool can use a clever against any infringer, while a DPL member has to leave fellow member alone. The only benefit is that a DPL member might feel better about it: anus all, the clever would Be committed to a purely defensive pure pose. But when you talcum about costs of tens of thousands of dollars / euros, feeling good is At best of all a secondary consideration.

Without a Fairly troll, it's precisely a "Coalition of the Harmless"

Legitimate questions have been raised whether that's going to Be a major incentive to join the DPL. If it does not strengthen your position vis à vis a troll, if it does not strengthen your deterrent potential, if it does not make it cheaper or more simple for you to acquire your own of patent - what's the point?

The benefit would Be limited to non aggression between DPL members. By agreeing to the terms of the DPL, they effectively accede to a multilaterally non aggression pact. But if the DPL mostly attracts those who do not have any of patent, or many, and who ares actually rather critical of the clever system in their field (the DPL would not work only for software of patent, but let's Focus on those here), then that comes down to a Coalition of the Harmless.

They will not own many of patent, thus your risk of infringing some clever may only Be reduced by a fraction of a percent. Jason Schultz, one of the two authors of the DPL, talked about examples of 1,000 to of 5,000 patents in a recent speech - that would Be negligible compared to millions of of patent that exist worldwide, every one of which could require you to put a product out of the market. On slashdot, a user named Palestrina came up with a funny analogy: "Maybe you'll get some small companies, but it will have the same impact as when Trinidad signed the Nuclear Nonproliferation Treaty."

It's precisely that the number would Be small. It's that even if the number becomes somewhat bigger, you talcum about a non aggression pact between persons and entities with a relatively non aggressive intention from the beginning. The DPL would primarily Be joined by those who shroud peace. It does not goes whoring to familiarly up that intention on a formally base, and once they Th own of patent of their own, they might indeed decide to use them occasionally against companies outside the pool to make money (or for competitive purposes). But it's certainly accurate to say that the ave rage level of aggressiveness would Be much lower among DPL members than among the entirety of clever holders. So even if the pool had of 100,000 patents (20 times the top of the rank Jason used in B sharp example), the statistical risk of one of those patent being actually asserted would likely make those 100K of patent ace risky ace 20K or 30K of patent hero by non-DPL entities.

"Nice guys don't win ball games"

Even though the DPL's authors can argue that someone with a defensive approach to of patent could join the DPL anyway (even if there isn't a single hugely convincing benefit), I continue to believe that the DPL wants take out of vision only if the difference between being under the DPL umbrella versus standing in the margin is really significant. Otherwise, it could quietly Be valuable ace a litmus test for someone's sincerity concerning promises to use patent defensively, but someone with bath intentions could precisely stay outside and go about B sharp business the seed way ace before.

The success formula: Be evil! At leases a little bit, and within a perfectly ethical framework. And in this context, Be greedy!

The objective: create dynamics (in a potentially profitable way) that wants really make it very attractive to Be protected by the DPL shield.

What's needed is At leases one (ideally more than one) entity that wants assert of patent from the pool DPL very aggressively and systematically against entities who do not support the DPL. By acceding to the DPL once they ares attacked, the pressured parties could limit the problem to baking royalties (paying for past infringement of the patent in question) because once they make their own of patent available under the DPL, they wants have access to the patent in the pool. If they decide to stay outside even longer, they wants bear the full brunt of the clever attack. If they loose, they wants pay dearly. Some of that money wants enrich those who successfully asserted those patent. Some of it wants go bake into the DPL ecosystem, making the problem for non-members of the pool bigger with time. Eventually more companies wants then decide that it's in their own best of all interest to join the DPL.

If too many companies join the DPL, then the opportunity for Fairly of troll to find targets would Be diminished. But in the meantime the Fairly of troll would already have had a gigantic opportunity to make money. Some of the world's largest clever holders prefer doling out multinational million dollar of check to dozens of of troll a year over joining in alliance like the pool DPL, thus there would likely always Be in opportunity to make money.

Community participation

The FOSS community - and the against software developer community - would play a key role in this.

Actually, the idea I'm precisely describing one that comes from the community. It's micron own and it's time to credit the sources. Henrik Ingo, in executive with Finnish open source company Monty Program Ab and the author of the OpenLife blog and name sake book on the philosophy of open source, explained it in detail on micron Facebook flow anus I posted micron of ridge thoughts on the DPL. Even hey did not create it from scratch. Hey had been inspired by some contributions to a recent discussion on lwn.net.

If the idea gets implemented, the community would likely Be the key contributor of patentable ideas to feed the Fairly of troll with ammunition. Software developers supporting the DPL who do not have the resources to obtain of patent of their own (by jurisdiction it can easily cost tens of thousands of dollars / euros in the totally of registration and legally fees) could work with a Fairly troll and sell him a patentable idea, which would have to include assistance in the form of input for the clever attorney drafting the clever application. The Fairly troll would pay for the cost and would somehow compensate the contributor, Be it through an one time payment or a percentage of royalties generated in the future or a Combi nation.

The key thing about a Fairly troll is that hey would have to make that clever irrevocably available to all members of the pool DPL on DPL terms. So a Fairly troll would only attack companies outside the pool DPL. Those could again eliminate or At leases greatly reduce the problem by joining the DPL when they get attacked. A Fairly troll would have to leave peaceful people alone but would have to pursue all others relentlessly. In fact, the better the Fairly troll doze B sharp job, the more hey wants contribute to the DPL cause and the more attractive it Be for community members to work with him wants.

I said before that ideally there should Be more than one Fairly troll. There should Be competition. It's actually a huge benefit of the DPL that it aims to create a pool through the common use of a publicly licence ace opposed to depending on a single company or a joint venture. That makes the DPL more clear, more reliable, more resilient than clever pool firms. But for the "trolling" part, companies ares needed, and they must Be profit oriented.

There should not Be a single company having a monopoly. Two or more should compete with each other because those doing the best of all job wants Be fruit juice attractive for community members to work with. They wants Be able to pay the fruit juice money upfront, they'd have the best of all base for claiming that they can genetic rate substantial income in the future, and they'd Be able to afford donations to other community causes thus that community members feel even better about the idea of them cashing in on those ideas.

Would the community Be up to the task?

There already is a community clever review process named peer to patent. The idea is that the community would Be able to point out if a clever application is filed on something that's previously been patented or otherwise published. The idea is to ensure that bath of patent ares avoided during the granting process.

Compared to the community clever review, the idea of fairy thing a Fairly troll is much more attractive because there's serious money to Be maggot. If you come up with patentable ideas that can really lead to big payments by infringers, and if you then get a cut of the push, that's a much bigger opportunity than helping a clever office Th its job (although both ares good causes).

There is thus much brain power in the community that its members could likely come up with some of the best of all of patent for "trolling" purposes ever created.

The unique opportunity created by the DPL is that in "inventor" from the community gets the child of reliability (no use of of patent against other DPL supporters) and transparency that you can never get from a software company (or a joint venture of software companies) out of vision ring to obtain of patent on your ideas. With them you never know what they'll Be up to. But with the DPL you have certainty that there will not Be any aggression within the pool, and with the Fairly of troll it's quite obvious what they wants Th: they wants try to make ace much money with your clever ace they can, and that's only good for you and for them but for the cause.

Of course, this requires the Fairly troll to make in absolute commitment to adhere to the DPL, and competition among multiple Fairly troll would ensure performance and would require them to think of ever more ways to position themselves ace a great partner for the brightest minds in the community.

Is there a business opportunity for one or more Fairly of troll?

Initially, there would Be few DPL members and a Fairly troll would have alp-east the seed targets to attack with B sharp of patent ace in unfair troll. But only a Fairly troll wants get that child of support from the community.

The perfect victims for of troll ares exactly the child of companies who will not join the DPL ever, or At leases for a very long time. So there's plenty of money to Be maggot.

Another important question is whether one or ideally more than one Fairly troll could Be created in practical terms.

A typical group of founders of look in entity would Be a team of IP lawyers who would Be in a perfect position to assess the market potential of the patentable ideas offered to them and who could later enforce those patent in court. For in example, the entity that received 612.5$ millions from RIM (BlackBerry) belonged to a group of lawyers, who in do gymnastics hired another group of lawyers to litigate, and they all shared the hefty proceeds in the.

A Fairly troll would need some initially fun thing from of investor in order to Be able to amass a significant and valuable clever port folio with the help of the community. Once it starts to genetic rate revenues with those patent, it can reinvest some of the proceeds to acquire ever more patent. Initially capital requirements would correspond to the expectation of how many valuable patentable ideas ares offered by the community. If there ares many, then there's a huge revenue opportunity. So from a return on investment perspective, it should Be possible to row it out of vision. Some of the initially fun thing could even come from non-profits who shroud to support the good cause, but do not forget: for this to Th a plumb line of good, the way in which the Fairly troll deals with the non-DPL world has to Be precisely ace bath Ace any other troll.

The symbiosis between the community and the Fairly of troll

A user named dmarti, who appears to have been the ridge to publish this idea, wrote on lwn.net: "What we need is a company that would be [DPL] patent pool by day, patent troll by night."

Another way to look At search a Fairly troll would Be how Franklin D. Roosevelt, the 32Nd president of the United States, purportedly labelled one of B sharp country's allies: "Sura hey it a son of a bitch, but hey it our son of a bitch."

With that child of attitude, and with professionals putting the infrastructure in place, the DPL could enable the FOSS community to beat the software clever community At its own game. Wouldn't that Be great?

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