| A lot of startups get sued by Non Practicing Entities (trolls) that have no operating business to speak of. That provides the slimmest counterattack surface - so not sure how useful it is to have a portfolio to hit back. I think a better defense mechanism would be a legal defense fund that would force the trolls to make their case at trial, to go through discovery, to bring expert witnesses. Because the law firms that represent them work on contingency, this would effectively cut into the potential licensing fees, and make trolling less profitable (and less likely). Also, a lot of trolls extract patent licensing fees out of startups for patents that should have never been granted, and that deserve to be invalidated (e.g with prior art), but the process of getting a patent thrown out is expensive, so having a fund would greatly help. The other strategy that could work is to get all the startups that get sued by a troll for a specific infringement and make a sort of "reverse class action" - making it possible for the startups to re-use the same lines of argument, evidence, etc in their cases. |
This kind of arrangement is not useful for countering NPEs because NPEs are non-practicing by definition. Since they are non-practicing, you can't countersue for infringement.
Your note about cooperation between potential defendants is spot-on. The difficulty is in getting them to cooperate. Accused infringers are likely to be competitors who may not be inclined to cooperate. Further, it is to the advantage of each to simply license the patent and wait for another accused infringer to do the work to invalidate the patent, at which point they can all stop paying license fees. (A classic "free rider" problem.)
By the way, a company can buy patent infringement insurance that will pay for litigation or settlement costs, but it isn't clear that it is worth the premium.