So why would anyone buy in before they get a letter, or maintain their membership once they're no longer in court?
Plenty of people have already gotten a letter; if they all pooled their resources they'd have a decent defense fund already.
> , or maintain their membership once they're no longer in court?
This one, I agree, is harder. Best I can propose is a minimum 5 year membership once you've been sued. Or tweak it some other way so that membership is slightly cheaper, or about as much as, settling.
The ultimate protection racket! "You've got a nice product here, shame if a lawsuit happened to it..."
Wouldn't you know, it already exists: https://en.wikipedia.org/wiki/MPEG_LA
The key distinguishing factor here is the protection pool actively seeks to invalidate bad patents. It could also lobby for patent reform. By doing so, it makes patent trolling less profitable and thereby, reduces the need for itself in the future. It's like a health insurance company funding research into perfect health and immortality (but more achievable).
Per my understanding, patent pools also don't offer any protection against non-practicing entities, correct? Since patent trolls don't use any patents themselves, a defendant in a patent suit can't assert any of the pool's patents against the troll in a countersuit.
a) it can be structured like a credit union or something and owned by its members (reduces incentives for it to grow beyond what's necessary)
b) make it retroactive i.e. you don't have to already be a member to get protection. you can choose to buy in after you've been sent a letter
c) a protection pool of sufficient size and resources might do enough to invalidate so many patents that trolling simply becomes unprofitable. EDIT: Especially if suing a pool member poses an existential threat to the troll in the form of invalidating their entire portfolio. As Cloudflare have shown, you only need one party to stand up for themselves and contest the patents. In that case, premiums go down long-term
This is obviously different from patent pooling and cross-licensing agreements companies use to defend themselves against other practicing entities.