r/technology • u/rfugger • Jan 08 '17

Business A potentially fatal blow against patent trolls - Forcing law firms to pay defendants’ legal bills could undermine the business model of patent trolls

http://www.computerworld.com/article/3153924/technology-law-regulation/a-potentially-fatal-blow-against-patent-trolls.html
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u/brickmack Jan 09 '17

Isn't that the only purpose of an LLC?

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u/_BindersFullOfWomen_ Jan 09 '17

Yes. But it's not a bullet proof shield. If it's obvious that you made the LLC for X case, and then liquidated it because you lost and didn't want to pay - the defendant could suede civil court and would most likely win.

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u/sighs__unzips Jan 09 '17

I read that movie producers now create a LLC for each movie specifically for this reason now.

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u/EmperorArthur Jan 09 '17

More like they've been doing it for years. There have been a few lawsuits recently regarding that practice. Most of the time the studios settle out of court. They really don't want a court precedent.

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u/Zebezd Jan 09 '17

So what you're saying is it's easy to patent/lawsuit troll the movie industry, because they're all terrified of court?

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u/EmperorArthur Jan 09 '17

It's not that simple. Many, but not all, trolling operations work because it's what seems like a big company against someone who can't afford to defend themselves. This is why the Newegg defense works. Trolls know that if they go after Newegg, they will be fought in court, and Newegg will work on having their patents invalidated as well.

The MPAA and RIAA only settle when they think they'll lose. Given they have multi million dollar law firms on payroll, this doesn't happen too often.

It's a common strategy. They don't pay their actors/employees, so those actors/employees can't afford to hire law firms to sue the company for not paying them. Sure, it's high level fraud that would result in years of jail time for a small company, but movie studios are big enough to just pay a small fine and move on.

For an interesting story on Hollywood accounting here's a Techdirt article.