An email from someone that has been through this

This is an email from someone that has been through this before.
I wrote not a single word of this, and apologize for a possibly-negative or crude tone, but this email to me exposes the truth about how patent trolls operate… decide for yourself what you think about it.

OK guys, we had a few “incidents” so far. Starts with the usual aggressive patent infringement claim with a settlement offer that is below the potential legal costs if you decide to defend. The trolls gauge what they can get out of you based on your public image and perceived size of your pockets. They rarely go for a single company but tend to go for between 5 and 30 at the same time. The choice is done very carefully. There must be some money to be made so tiny outfits are of no interest. Large companies are dangerous as they could potentially have good legal abilities – but they can also be a specific target as they will likely see the economy in early settlement (i.e. settle even if you know you are not infringing – it is just cheaper).
The patent itself does not matter much. It does not matter if the patent is valid or not. It does not matter if there is prior art or not. The patent is a tool.
The troll must get you to panic (usually easily done). Be very careful how you respond. There is only a single possible response and you need to be aggressive. You have added the whole story to your website. Bad move. The troll now knows that you are in a panic. He has got you.
The troll has no intention to go to court – but he is a lawyer (they all are) and he will. The U.S. legal system helps him. He made it. Jury in a small town in Texas. You have little chance if it goes to court
and are not prepared. You are the bad guy.
However – he is dead scared of biting off more than he can chew. This is why the initial response needs to be focused and correct (and aggressive, might have mentioned that). You need to react like a rattle snake. The troll must drop you before he starts proceedings. The troll makes that decision within 2-3 weeks of his initial attack. Those that give weak and meek responses are toast. Those that come back looking like they are old hands at this game get dropped. No point for the troll – none whatsoever.
OK, seems you are past that point so the biggest opportunity to get out of this has been lost. Now you are in pre-trial. Got yourself a lawyer ? It’s your money you are now spending. The troll has almost no expenses. He will start to communicate and press for an out of court settlement. He might even make you (or somebody else) a very cheap offer. He needs one of the targets to collapse and sign for a non-exclusive license. Just one. That makes the troll much stronger and he will use that to try and force others. He will even tell you that he has signed with others – even if this is not the case. So – your best option now is communication with all the other defendants. This you MUST do. You are all on one side. …
The troll wants to get as much money as possible before the trial – if he manages to get his budget he will drop the trial before he starts.

OK what do you do ? You have started. Prior art in this case is good and plenty. The patent is invalid and thus there is no infringement. Work with the other defendants on a common purpose. Document the prior art, take the patent to pieces – every single claim. Don’t wait for your lawyer to do that. You must do this – you have a better understanding of the patent. Learn how patents work. What is a claim ? When is it valid and how does this get proven in court (or dis-proven). This will likely not be the only time you may be facing something like this. What you learn now will help you in the future.
Do a claim sheet. Write down every claim and why the claim is not valid (could be prior art or a technicality). Important: Short reasoning. Juries have a short attention span. Keep it simple. Then add for every claim why your product does not infringe it – again short and sweet and to the point.
You can mention some of the more pertinent points in your aggressive response to the troll. If the troll knows you guys are all working together and have good material to invalidate the claim (or even the patent) he may cut his losses and run – but it is important that he gets the idea. It must be absolutely clear to him that he has zero chance and he is wasting his time and effort. Do not allow your lawyer to do this. Lawyers are nice to each other and buy each other lunch (with your money). I am serious about this one. Been there, done it and got the T-shirt.
Your troll must know that he is not going after 8 individual companies. He must know that he is going after 8 fighters that have just founded an army. I know this sounds corny but it works. This is a game and the prize is your money.

So far we have managed to counter every patent infringement claim before it got to court. Our first time was the worst but we learned. We learned to talk to competitors and share effort and pool resources. We learned to use lawyers as tools but not to let lawyers use us … Know that and use that. Do not panic. Make sure no one capitulates and signs a license. That looks bad if it gets to court – that is almost your only threat.
In our first case one of the defendants decided to pay a $250000 fee. It was a well known aerospace company. They told us afterwards their in-house lawyers decided it was simply cheaper than going to court so it was just written off as cost of doing business. It was also the worst thing they could have done – the troll almost immediately got back to them with more infringement claims for some other patents he dug up. The rest of us stood fast and fought and got our act together. Once the troll realized we where speaking with one voice he simply dropped the whole thing. The second time (another troll) we (a couple of EFIS makers) all stood together immediately (the claim was against some 50 companies in total). The troll immediately dropped the EFIS guys and concentrated on the others that where showing signs of panic.
Couple more since then. All along the same lines give and take a few variations. It works.

Don’t get me wrong – I will never knowingly infringe a valid patent and if it is by accident I will make amends. However, wave one of those pseudo patents in my face and I see red.

Good luck – I will try and follow your progress.

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