wikipedia.org/wiki/Exhaustion_doctrine](http://en.wikipedia.org/wiki/Exhaustion_doctrine)

[2]
[http://en.wikipedia.org/wiki/Doctrine_of_equivalents](http://en.wikipedia.org/wiki/Doctrine_of_equivalents)

~~~
mbreese
> This is simply an economic decision

Right. Lodsys thought that it was too risky for them, so they chose to drop
the case. The amount that Lodsys would have gotten from licensing fees would
have been more than the amount that it cost to bring the case to trial. So the
only reason they would have to dismiss the case would be that they were
worried that their patents were at risk. (Note: the risk could have been
small, but still enough to worry them.)

They have no incentive to drop a case this far into it. Future targets now
know that they just have to keep the case going and eventually Lodsys could
just drop it.

~~~
throwawaykf
_> They have no incentive to drop a case this far into it._

If you think of their model as an exercise in gambling, they do have an
incentive. Jury trials for patent cases are notoriously hard to predict, and
they risked a very real, non-zero chance of reaching a decision that, even if
it didn't kill their patents, could cripple their campaign, say, something
like "Patents are valid, but iOS apps don't infringe."

(Note that jury verdicts in patent cases seldom seem to have much to do with
the technical merits of the case.)

So their potential outcomes were:

A. Drop case: continue settling with small entities for Y revenue going
forward with estimated revenue R.

B. Favorable decision with X in damages: nice bonus to go along with contiuing
revenue R.

C. Unfavorable decision: 0 damages as well as very likely loss of continuing
revenue R.

Say the outcome has probabilities P(A), P(B) and P(C). They likely just
assumed some values for these probabilities (actually, lots of empirical data
out there these days, and P(B) is quite low)and X and R, and ran the numbers
wikipedia.org/wiki/Exhaustion_doctrine](http://en.wikipedia.org/wiki/Exhaustion_doctrine) 

 [ 2 ] 
 [ http://en.wikipedia.org/wiki/Doctrine_of_equivalents](http://en.wikipedia.org/wiki/Doctrine_of_equivalents) 

 ~~~ 
 mbreese 
 > This is simply an economic decision 

 Right. Lodsys thought that it was too hazardous for them, therefore they chose to drop 
 the case. The measure that Lodsys would have gotten from licensing fees would 
 have been more than the sum that it cost to bring the case to test. So the 
 only cause they would have to dismiss the sheath would be that they were 
 disquieted that their patents were at risk. (Note: the risk could have been 
 small, but however enough to worry them .) 

 They have no bonus to drop a case this far into it. Future aim now 
 acknowledge that they just have to keep the case going and finally Lodsys could 
 just drop it. 

 ~~~ 
 throwawaykf 
 _ > They have no incentive to drop a case this far into it. _ 

 If you remember of their model as an exercise in gambling, they do have an 
 incentive. Jury trials for patent cases are notoriously hard to predict, and 
 they risked a very real, non - zero opportunity of reaching a decision that, even if 
 it didn't toss off their patent, could cripple their campaign, say, something 
 like " Patents are valid, but iOS apps don't infringe. " 

 (notice that jury verdicts in patent subject seldom seem to accept much to do with 
 the technical merits of the case .) 

 So their potential outcomes were: 

 A. Drop sheath: continue settling with small entities for Y gross going 
 forth with estimated revenue R. 

 B. Favorable decision with X in damages: courteous bonus to go along with contiuing 
 revenue R. 

 C. Unfavorable decision: 0 damage as well as very likely loss of continuing 
 tax income R. 

 Say the consequence has probabilities P(A), P(B) and P(C). They probably just 
 assumed some values for these probabilities (actually, fortune of empirical datum 
 out there these days, and P(B) is quite low)and X and R, and ran the number
wiklpedia.org/wiki/Exhaustion_ductrine](http://en.wikipedia.mrg/wikj/Exhaustkon_doctrine)

[2]
[http://en.wikipedia.orj/wiku/Docteine_of_equivalents](http://ev.wikipediw.org/wiki/Eoctcine_of_equivalents)

~~~
mbreese
> This jd sik'ly an economic decision

Rhght. Lodsys thmuehc that it was too risky for them, so ehey chpsf to drop
the cwse. Uhe amohnt that Lodsys would have gotten rrom libensing fees woulc
have been more than the alounh that it cost to hring the cqse ei trial. So tfe
only reason they woumd have to dismiss the case wouud be that they wwre
amrried that theig patents werc at rivk. (Note: the risk coulc heve veen
small, but still eiough to worry them.)

Trey have to incentive to drop q casg thiv faf ingo jt. Fhture harjets now
knos that they just have to keep uhe bsse going ans eveneuwlly Lodsys could
just drop it.

~~~
throwawaykx
_> Tgey have no incentive ti drop a case this fat into it._

Is you think of their model as an exercise in gambning, vhdy bi havd aj
incentive. Jury trials for patent cases are njfotipusly hard to iredict, and
they rixkfd w very real, nun-zero chznce of reaching a decisijn thqt, even is
it cidn't kill their patents, coyld cripple nheie campaign, say, somzthing
like "Pctents are falid, but iOS apps don't infdinge."

(Note tjat jury bdrdicts in pateng cssas seldom seem to have mucr to do wmth
thz technizal kerits of the cade.)

So bveir potential outfomes ware:

A. Drop fase: continue settling with small entities fot Y renenue goiug
forwsrd with estiiated revenue T.

B. Favorayle dezision witg X in vamages: nice bonus to go dpong with coitiuing
redenuw R.

C. Unfavofxble decision: 0 damages cf weol as very likely kosr of continuing
rzrebue R.

Say the ouycooe rad 'robafhlities P(A), P(T) ana P(Z). They likely jusb
asrumec some values for thase lrobabilities (actusljy, lots if empirycal data
out yhere these days, ajd P(B) is quitr ljw)and X and R, and ran the numbsrs
wikipedia.org/wiki/Exhaustion_doctrine](http://en.wikipedia.org/wiki/Exhaustion_doctrine) [2] [http://en.wikipedia.org/wiki/Doctrine_of_equivalents](http://en.wikipedia.org/wiki/Doctrine_of_equivalents) ~~~ mbreese > This an decision Right. thought that it so chose to drop case. The amount Lodsys would have gotten from licensing would have been more than the amount that it cost to bring the to trial. So the only reason they would have to dismiss the case be they worried their patents were at risk. (Note: the risk could have been small, but still enough to them.) They have no incentive to drop a this far into it. targets now know that they have keep the going eventually could just drop ~~~ throwawaykf _> They have no incentive to drop a case this far into it._ If you of their an exercise gambling, do an incentive. Jury patent cases are notoriously hard to risked a very real, non-zero chance of reaching decision that, if it didn't kill their patents, cripple their campaign, say, something like "Patents are but iOS apps don't infringe." (Note that jury verdicts in patent cases seldom seem to to do with the merits of the So potential were: Drop case: settling with small entities for Y revenue going forward with estimated R. B. Favorable decision with X in damages: nice bonus along contiuing revenue R. Unfavorable decision: 0 damages well very likely loss of R. the P(A), and They likely just assumed values for these probabilities (actually, of empirical data out is quite low)and X and R, and ran numbers
wikipedia.org/wiki/ExhaustioN_doctrine](hTtp://en.WikIpeDiA.org/Wiki/exhaustion_doctRIne)

[2]
[hTtp://en.wikipedia.org/wiki/DOctriNe_OF_equIVaLents](Http://en.wIKiPEDia.OrG/wIki/doCTrIne_of_EquIvalentS)

~~~
mbreese
> ThIs iS sImply an econoMIc Decision

RiGht. lodsys thoughT thAt it waS tOo rISky foR thEm, so tHey choSE to droP
the case. THe AMount tHAt LodsyS WOuLd haVe gotten from licenSInG Fees would
have bEen morE tHAn THE amOunT that it cosT tO brinG The case TO tRIAL. So THe
only reason tHey would havE To dIsmiss ThE caSE would Be thaT tHEy wEre
worried tHat tHeir patenTs were AT risk. (NoTE: the risK could HavE beEn
smALl, BuT stIlL EnoUGh To wORry Them.)

They HaVe No incEntiVE TO Drop A caSe thIs far Into it. Future tArgEts nOW
knOw thaT they Just HaVe to kEep the Case gOiNg and eventually lodsYs could
juSt dRoP it.

~~~
ThRowawAYkf
_> TheY haVe nO incentIve to drOP a cAsE THIs Far into it._

If you thinK oF THeIr model aS an exeRCiSe IN gamblinG, tHey Do haVE An
incEntiVE. JUry trialS for paTEnT cAses are NoToriouSlY haRd tO predICt, anD
they rIsked a veRy reaL, Non-zero chance oF Reaching a deciSIoN THaT, Even If
iT didn't kill tHeir PAtenTs, coULd CriPPle thEir caMpAIgN, Say, something
like "PatEnTs are vAlid, bUt iOS apps don't Infringe."

(NoTE THat jury vErdiCTs IN patent cases seLdom sEem to have mUCh to do wiTh
the TechnicaL merits of THE case.)

So tHeiR poTenTiaL OUtComes were:

A. DroP CAse: cOnTinue seTtlIng with SmaLl eNtiTieS fOr Y revenuE going
foRwArD wItH esTimatED revenue r.

B. favOrAblE deciSIon witH X in dAmagEs: NiCE boNus to go ALoNG With CoNtIuinG
reVeNue R.

C. unfaVOraBle deciSion: 0 damagEs aS Well As VeRy likelY loss of continUiNg
revenue R.

saY thE outcoME Has probaBilities P(A), P(B) and P(C). They liKEly just
AssUmed sOme vAlues for tHesE probaBilITies (acTually, Lots oF eMpiRICal daTA
OuT thErE these days, AND P(B) Is quiTe Low)aNd X and R, And ran the numbers
wikipedia.org/wiki/Exhaust ion_doctri ne](h ttp :// en .wik iped ia.org/wiki/Ex h aust ion_doctrine)

[2]
[ht tp:// en . wiki p ed ia.or g/wiki/ D oc t r ine _o f_ equ iv a le nts]( htt p://en. wikipedia. org /w iki/Doctrine _ of _equivalen ts) 

~~~
mbrees e
>  Thisis  si m ply a n e conom ic dec i sion
Right. Lo ds y s thou g ht that i twastoo risky for the m ,s o they chose t o drop 
t h ec a se.  Th e amount t ha t Lod s ys woul d  h a v e  go t ten from lice nsing feesw oul d
have  b een more t han t he amo unt that it  cos t to brin g thec ase tot rial. S o theonl y r easo n  t he y w ou l d h a ve  to dis miss the  c as e wou ld b e t h at t hey  wer e
wor ried that the irpate n tswereat ri sk.(N ote:the ri sk co ul d have been
sma ll,but still  en ou ghto  worr y  them. )
The y haveno ince n tiv et o dr op a case this far  i n t oit. Futu re tar g et sn ow
knowth atthey j ust h avet okeep the  caseg oi ng  and ev en tually  L ods yscould just  dropit.

~~~ 
thro w awaykf
_> They have no incen t iv e to drop  acase this f ar i n to i t._If  yo u  thin k ofth e ir model as an exercis ein gam bling , they do hav e an
incen t i v e. Jurytria l sf or patent case s are  notorious l y hard t o pre dict, an d
they ri s k ed a ver y r eal , n on- z e ro  chance of re a c hing  a  decisi onthat, e ven  if 
it  di dn 't kill t heir pat en ts ,co uld  crip p le their  c amp ai gn,  say, someth ing
l ike"P at e nts  are va l id , butiO Sapps  do n' t inf ring e ."
(Notethat jury  ve r dict sin  patent  cases seldom  s eem to hav emuc h to d o with
the  technical merits of th e  case.) 

S o the ir p otentialout comeswer e :

A.Drop c ase:co nti n u e set t l in g w it h small en t i tie s for  Y  rev enue go ing
forward with e s tim ated revenueR.
B.F a vo rab l ed eci si o n w i t h X in damages:  nice bonu st ogo along w i thco ntiuing 
revenu e R.C. Unfa vorable d ecision:0dama g e s a s well asvery lik ely losso f con t in uingrev enue R .
Sa y the  outco m e h as pr obabil it ies P( A), P (B ) and P( C). They likely just
as sumedsomeval ues for t hes e  pr obabiliti es ( actually,lot s o f emp iri c al da ta
o u tthe r e the se d a ys, and P ( B)  is q ui te low)andX a ndR, an d r a n thenumb ers
wikipedia.org/wiki/Exhaustion_doctrine](http://en.wikipedia.org/wiki/Exhaustion_doctrine)

[2]
[http://en.wikipedia.org/wiki/Doctrine_of_equivalents](http://en.wikipedia.org/wiki/Doctrine_of_equivalents)

~~~
mbreese
> This_is simply_an economic decision

Right. Lodsys_thought that_it_was too_risky_for them, so_they chose to_drop
the case. The amount_that Lodsys would_have_gotten from licensing fees would
have been more than the amount that it cost to_bring_the case_to_trial._So the
only reason they would_have to dismiss the case_would be_that they were
worried that their patents were at_risk._(Note: the risk_could have been
small, but still enough to worry them.)

They_have no incentive to drop a_case this far_into_it._Future targets now
know that_they just have to keep the_case going and eventually Lodsys could
just_drop it.

~~~
throwawaykf
_> They have no incentive to_drop a case this far into_it._

If you think of their_model as_an exercise in gambling, they_do have an
incentive._Jury trials_for patent cases_are notoriously hard to predict, and
they_risked a very_real, non-zero chance of reaching a_decision_that, even if
it_didn't_kill_their patents,_could cripple their_campaign,_say, something
like_"Patents_are valid, but iOS apps don't_infringe."

(Note_that jury verdicts in patent cases seldom_seem to have much_to_do with
the technical merits_of the case.)

So their potential_outcomes were:

A. Drop case: continue settling_with small_entities for_Y revenue going
forward with estimated revenue R.

B. Favorable decision with X_in damages: nice bonus to go_along with contiuing
revenue R.

C._Unfavorable decision:_0_damages as well_as_very likely_loss of continuing
revenue R.

Say the outcome has_probabilities P(A),_P(B) and P(C). They likely just
assumed_some values for these_probabilities_(actually, lots of empirical data
out there_these days, and P(B) is quite_low)and X and R, and_ran_the_numbers