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Fighting patent trolls and corruption with the Magnificent Seven business-model


My new Locus column, Collective Action, proposes a theory of corruption: the relatively small profits from being a jerk are concentrated, the much larger effects are diffused, which means that the jerks can afford better lawyers and lobbyists than any one of their victims. Since the victims are spread out and don't know each other, it's hard to fight back together.

Then I propose a solution: using Kickstarter-like mechanisms to fight corruption: a website where victims of everything from patent trolls and copyright trolls, all the way up to pollution and robo-signing foreclosures, can find each other and pledge to fund a group defense, rather than paying off the bandits.

It's the Magnificent Seven business model: one year, the villagers stop paying the robbers, and use the money to pay mercenaries to fight the robbers instead.

What would a Kickstarter for Class Action Defense look like? Imagine if you could pledge, ‘‘I promise that I will withhold license fees/settlements for [a bad patent/a fraudulent copyright fee/a copyright troll’s threat] as soon as 100 other victims do the same.’’ Or 1,000. Or 10,000. Hungry, entrepreneurial class-action lawyers could bid for the business, offer opinions on the win-ability of the actions, or even start their own kickstarters (‘‘I promise I will litigate this question until final judgment if 1,000 threat-letter recipients promise to pay me half of what the troll is asking.’’)

Basically, it’s the scene where the villagers decide to stop paying the bandits and offer the next round of protection money to the Magnificent Seven to defend them.

There’s a lot to like about this solution. Once a troll is worried about a pushback from his victims, he’ll need to raise a war-chest, and since the only thing a troll makes is lawsuits, he’ll start sending more threats. Those threats will attract more people to the kickstarter, raising its profile and its search-rank. The more the troll wriggles, the more stuck he becomes.

We could spin out a thousand possible variations on this – a pro-rated refund if the lawyer wins without spending all the money, or preferential shares to early entrants; a traditional plaintiff’s side class-action sister-project that goes after trolls who’ve lost their suits and uses their defeat as the basis for stripping them of every asset to their underwear and redistributing it to victims (and lawyers, of course – though that’s not a bad outcome, since it means lawyers might be willing to spend more on the ‘‘defense’’ part of the action in the hopes of a bigger payout down the line).

Collective Action


One Response to “Fighting patent trolls and corruption with the Magnificent Seven business-model”

  1. Chris says:

    And you aren't doing this yet why?

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