Suing Open Source Startups - A New Scam? 104
Anonymous Crowhead asks: "I'm posting this anonymously for reasons that will soon be obvious. We're a fairly new startup company who specialize in products, and we have a policy of making all our software Open Source. A while ago, we received an notice from a company claiming that we were violating some of their patents, and that they had found this out by looking at our code. They gave us one of the two options - either make the product closed source and sign up for a percentage of the profits with them, or provide them with a stake in our company. Our legal advisors felt that it might be wise for us to settle, but we decided to press them further for details of the infringement and refused to yield. We haven't heard from them since - so either we called their bluff, or they've gone to come back with more legal firepower. No matter what, we feel that this is a scary precedent. Have any other entrepreneurs around here experienced anything similar? Is this one of the after-effects of the SCO episode - to go after unwitting small startups who cannot fight back? Personally, this was a nightmare for our company, and we are not aware of any patents that we may be violating."
If it's just a threat.... (Score:3, Interesting)
its an easy way to get money. (Score:3, Interesting)
Re:If it's just a threat.... (Score:5, Interesting)
Re:Always let them haul YOU into court. (Score:3, Interesting)
IANAL, of course.
Lawyers! (Score:3, Interesting)
In this case, you can fight, argue and whatnot with this patent extortionist infinitely. If they are really serious you will get paperwork (e.g. start of a lawsuit). Let it go that far - showing them that you will not just *take it* will most likely make them run away. If they are serious then they will push forward to sue you and that is the right time to discuss details of the infringement and possible settlements.
There are a ton of business terrorists and extortionists out there. It is an artifact of our legal system. Ignore them until you can't anymore.
And for christsakes, stop talking to your lawyer. The more you talk to your lawyer, the worse your life and business will be (because he will keep you spinning in circles that are important to him and hazardous to you). Use him only when you have no other option.
software patents (Score:3, Interesting)
There are only a few true defenses against this kind of attack. The first is to have a large patent portfolio of your own, to countersue any litigants. Unfortunately, this doesn't work against the recent trend of companies in the business of lititgation (eg. SCO). How can you sue a company for patent infringement if they have no product?
The second defense is a large bankroll. Not very many people successfully sue IBM, since IBM has an army of lawyers at their disposal to delay the lawsuit until the litigants run out of money.
My advice to any software developers is to go to law school and become lawyers. Litigation is the fastest growing industry in the US. Software companies will be put out of business by litigation companies, the only ones left will be behemoths like IBM and Microsoft, both of which will be using dev teams in places like India and China, where they can be paid a fraction of what US developers make. So quit your job, and go to law school. Try to make enough money so you can retire when the system collapses in on itself. Things won't be very pretty at that point.
We can continue to press our government for patent reform to try to prevent all this, but they won't listen. They haven't listened in the past, and they won't listen in the future. I give my money to the EFF, I write letters and emails to my congressional representatives, yet nothing makes a difference. Instead of fighting for reform, we're fighting the INDUCE act so IP law doesn't become even *more* insanse. It's a losing battle. The lack of proportional representation in the US forces the election to be decided on just a few issues. The rest are auctioned off to the highest bidder for a few campaign contributions.
Wow, I'm jaded. I remember when I used to have a shred of hope that things would improve...
Re:If it's just a threat.... (Score:4, Interesting)
It's common for lawyers to present a cost benefit analysis of this type of situation and quite often they will encourage a settlement, similar to the way a family pays off kidnappers to free a hostage or a retail business pays protection money to some street gang.
One wonders whether there is in fact a conspiracy in the legal world to encourage settlements, because if people challenged every questionable lawsuit that came down the pike, perhaps there would ultimately be fewer such suits, just as if all businesses refused to pay protection money there would be no protection racket (albeit, after some bouts of violence) and there would be no incentive to kidnap hostages either.
Re:you don't really lose anything.. (Score:2, Interesting)
1. Investors pulling out, for fear of the lawsuit
2. Customers and clients being scared of the credibility of our software
Besides, we're only a startup -- we do not have an established cred, nor we have the resources. If this proves to be a bad call on our part, it might just prove disastrous, although I hope not.
Anonymous Crowhead
Re:If it's just a threat.... (Score:3, Interesting)
I think there is a similar routine in the USPTO, basically recognition of the fact that bad patents slip through.