In some countries this is called organized crime. In this case it is like drug dealers and cartels: they get the drug dealer but the cartel continues to operate.

A few RICO cases could bring a lot of light to this space, but could be career suicide.

I mean, given the cost of litigation, and the inability to get counter-judgement (IE attorneys fees), this is already enough "reason".

These are litigation funding exercises, so the goal is protection of the "investors".

But you'd also get things like protection against discovery (the smaller entity has nothing to give you), etc.

This is the sort of thing where they go too far, and end up in jail despite thinking they're just good at playing the system. (see, e.g., prenda law)

Prenda is exactly what this brought to mind for me too. Maybe popehat will do a deep dive on this stuff.

At a minimum they’re doing a form of “liability insurance” by foisting 100% of the liability for 5% of the profits on a food truck owner.

That changes things beyond just liability - it also makes it appear judgement proof. And the dollar amounts indicate that companies may just settle because there’s nothing to win by a counter suit.

Makes me wonder if instead of settling it would be cheaper to buy the patent, knowing that the patent "owner" is only getting 5-10% of a settlement.

Presumably theres some contract with the patent "owner" preventing that, but maybe that would show they aren't really in control of the patent.

There almost certainly is, which is part of the reason the judge is poking this - "ownership" includes control and if they aren't really in control they're not really the patent 'owner' and that could change things.

Also judges in general don't like people being "clever".

“Dude you made 11k from this and now you’re in court. Judge is pissed, you might be in over your head. Sell me the patents for 10k, and we all can move on.”

I've been thinking about this a bit since the hearing, and here are some ideas:

- If lawyers for a defendant are going to settle (we generally prefer not to), we often want a portfolio license -- a "go away" license. By splitting up the patents among entities and keeping itself hidden, an entity like MAVEXAR can keep filing serial suits against the same targets and can keep receiving more expensive "global" settlements.

- It dodges liability for attorneys fees, since the entities have little or no money, and may decrease the chances of a fee award generally.

- It means that the entity with the patent has little or no discoverable information, decreasing the cost of suit because there is nothing to produce. Lawyers for that entity can also take stronger discovery positions because there is no concern about about responsive discovery.