The operative word in cs705's comment is incentive. The patent system is broken in such a way that not only does it makes possible to get away with this behavior, it encourages and rewards it. That's very different than merely "making it possible".

And the operative word in pg's reply is "ok". That Apple, MS, et. al. are acting in their objective self interest (and to the detriment of all of ours!) is an important point. But it doesn't speak to the moral issue which is that such behavior needs to be condemned and not excused.

If the system incentivizes this behavior, can a publicly traded corporation even choose to ignore it? Would shareholders be able to claim breach of fiduciary duties if they did?

Note: I am certainly not arguing that this is a good thing for anyone by any means at all.

> Would shareholders be able to claim breach of fiduciary duties if they did?

By claim, I suppose you mean sue over? In that case the answer is no. There's this notion that companies legally have to be run so as to maximize shareholder value, and there's some case law in Delaware to support that notion. But what overlooked is the context of those decisions. Invariably the litigation has to do with change of control or measures designed to encourage/discourage same. Outside of those contexts, the business judgment rule reigns supreme. So long as there's no self dealing and the company doesn't lie in its public statements, it is almost impossible for a shareholder to win a derivative breach of fiduciary duty case.

> If the system incentivizes this behavior, can a publicly traded corporation even choose to ignore it? Would shareholders be able to claim breach of fiduciary duties if they did?

Corporate officers have wide latitude in determining what actions are in the best interest of the corporation.

In a case like this, the incentive to initiate Nuclear Armageddon for profit has to be balanced against the cost of making developers hate you and desecrating your reputation and standing in the community. It is by no means clear that starting a war in which all sides are susceptible to take heavy losses will be in the interest of shareholders.

> can a publicly traded corporation even choose to ignore it? Would shareholders be able to claim breach of fiduciary duties if they did?

Patents are a weapon, and if one huge corporation has no "weapons" to defend itself with, then others with "weapons" will attack it. That's why they all have to participate.

In this case, they all - Google included - rushed towards a particularly juicy weapons cache, and whoever got their hands on it was going to use it on the others.

This is fucking ridiculous and disgusting, of course. But it's not the fault of these corporations - they're forced to play, because if one doesn't, then others will just force a massive competitive disadvantage on it. The real problem is the US patent system, the US courts, and the culture of feverish bullshit litigation at every turn that pervades the US.

A cold war is not as bad as an open war. The cold war is caused by the existence of the weapons. The open war is caused by launching the first warhead.

well, that's a tricky calculation. It's possible that Apple and MS have miscalculated the backlash on this, and they will be net losers. As for morality, although I disagree with it, there is a moral case for intellectual property rights. That this absurdity is an outcome of it suggests that there's something wrong with the foundational moral assumptions, but given that people are calling this a "nuclear" case - it's reasonable that many people did not forsee this coming.

4.5 billion dollars. If lawyers are even taking 1% of that - good gosh. So many other things in this world 45 million could be better spent on.

Robbing homes is possible and rewarding.

Saying that doing something wrong is rewarding is not sufficient.

Robbing homes has the disincentive of being illegal. What disincentive does this behaviour have?

Retaliation against the real parties in interest by the victims, destruction of the business reputation of anyone associated with this behavior and the reluctance of anyone else to implicitly condone it by doing business with them, causing outrage in Congress or the courts thereby spurring them to respond by making changes to the law that destroy the market value of a multi-billion dollar patent investment, ...

Exactly.

The first step in this is speaking up and saying, "Hey, this is really obviously wrong".

Part of the reason that the law doesn't have to get every incentive and disincentive right is because there are other mechanisms available.

I'd like to say that I was going to avoid doing business with these parties, but I already wasn't doing business with these parties, at least not to the best of my knoweldge.

This is a possible disincentive, but it doesn't currently exist. Calling public outrage against patent abuse a disincentive is the same as calling changes to the current patent system a disincentive: they don't currently exist.

I'm not sure what you mean by "don't currently exist" -- there is a general consensus that some form of patent reform bill is going to pass in the not too distant future:

https://www.eff.org/issues/current-legislative-proposals-pat...

By launching the mother of all trolls to the disgust of the industry at large, they're adding fuel to the fire and making it more likely that stronger anti-troll legislation will pass. Certainly you can expect Google to dump several million dollars more into lobbying for it now. But if that legislation passes and decimates the weaponization capacity of the patent arsenal they just paid billions of dollars for, they've just wasted billions of dollars.

Similarly, the general consensus here seems to be that what they're doing is totally unacceptable. Here where we have the people who choose which platforms to develop for, whose choices collectively make or break those platforms. Yesterday if you had a choice between hiring an extra developer to develop a Windows Phone version of your app or using the money to improve or advertise the Android version, you were more likely than you are today to do the thing that benefits Microsoft. Similarly, if you're Samsung or Asustek or Huawei and Microsoft has just loosed the troll upon you, well, good luck trying to negotiate favorable terms for any of them to ship Microsoft technology in any of their products.

And on top of all of that, how can they not expect Google to respond? If you start a war you can expect the other side to return fire. Maybe not in kind (by setting loose their own patent trolling entity), or maybe they will, but one way or another it's not like Google is incapable of striking back. What happens when they throw a billion dollars into WINE and Samba? Or add support for Kerberos, LDAP and Group Policy to the Google API so that companies don't need Windows domain controllers anymore? Doing things like that probably wouldn't move the needle on Google's bottom line, but it would stab Microsoft in the face. Which is what happens when you make enemies.

> By launching the mother of all trolls to the disgust of the industry at large, they're adding fuel to the fire and making it more likely that stronger anti-troll legislation will pass.

As I understand it, this company was formed during the purchase of the Nortel patents, which happened a couple of years ago. Not just right now. The company which was formed from investment of Apple, Microsoft, etc, is not under their direct control anymore. They basically paid a bunch of money to grant themselves immunity from these patents while creating a hazard / barrier to others.

They intentionally put the patents in the hands of a troll. Moreover, since the trolls generally don't have the capital to buy the patents up front, the transfer deals generally involve the selling party getting a large cut of the shakedown money the troll collects from its victims, so it's quite likely that they haven't recovered what they paid for the patents.

The fact that the timing of this happening at the same time as patent reform is on the table wasn't predictable some years ago is just part of the point -- you can't always predict blowback. The risk is part of the cost.

> Saying that doing something wrong is rewarding is not sufficient.

Good thing "rewarding" was not used as a sufficient threshold for either cs705's comment or mine then.

If nothing else, wouldn't you be open to shareholder lawsuits if you didn't engage in an action which was obviously legal and obviously profitable?

Weird reasoning. So anything legal and profitable must be done? Even for shareholders I think this can't be true. And anyway it is easy to show that going evil is harmful in the long term, e.g. with developers.

I don't like this any more than the next guy, but it's not like apple and microsoft aren't also getting sued. At some point offense can be the best defense.

Edit: also, apple and microsoft also actually make things. This puts them in a different class than patent trolls like lodsys(sp?)

Isn't Lodsys a child of Intellectual Ventures, which Microsoft and Apple are/were investors in?

You're right. It's not just the broken patent system. It's also the present business culture (for lack of a better term), which makes getting away with it seem OK to a lot of otherwise decent people in corporate America.