[whatshisface]

How's this?

1. You buy "litigation insurance."

2. You state that you are insured on your website.

3. The insurance company is required to defend in all patent cases that arise, so there is no doubt that you will be represented in court.

4. Nobody sues.

5. The insurance company makes a profit with no cost or risk.

[daemonologist]

You can buy IP insurance; the problem is that the proposed strategy only works against patent trolls. If you infringed a legitimate patent the insurer would be screwed, so they'd want to do an enormous (impossible?) amount of due diligence before writing the policy. As with most other insurance policies, insurers in practice are only willing to take on a portion of the risk.

[therein]

Couldn't some innovative insurance company create a policy that adds a clause like "policy kicks in if the litigant fits the criteria of a patent troll (as described above, lacking any assets besides the patent or a few patents that don't pass initial muster as legitimate, or has fewer than two physical locations with at least 4 non executive employees). Even saying something like "if the litigant has no health insurance for their employees" would actually easily preclude patent trolls as you'd have to be an actual decently sized company to be able to negotiate real health insurance for your employees.

[brandall10]

The only issue is misalignment of incentives.

A patent troll will take a look at such a policy and do the bare minimum to give off the appearance of a ‘real’ company.

And then the insurance company will simply go “yep, that tracks”, with little incentive to investigate as it’s not in their best interest.

[piker]

Adverse selection would be a big issue, but actually perhaps if the indemnity only covers defense, an insurer would be willing to take more risk (and have expertise in batting away these claims.)

[celestialcheese]

Is this a real thing for small companies?

I have no experience with this, and the only time I've gone and tried to get quoted for things like cyber liability, etc, the costs are incredible relative to the value of the business and revenues.