$1,000 per employee is the most bogus request I've ever heard in my life. Even if the concept were patentable, I'd say a reasonable demand would be $1 per Internet-capable scanner sold.
The patent trolls should really read Joel Spolsky's guide on pricing enterprise software. Saving $200,000 is worth hiring some lawyers to fuck you up. Saving $75 isn't.
Sure, but now you're anchored [1] at $1000/per. Some fools might pay it, and many more will be relieved when the law firm offers to settle for something much lower. That lower amount being how much they were really intending to shake you down for all along.
The people behind these scams have to use legal services as well. They do have to pay in some way for each letter that goes out. There's definitely a "sweet-spot" in the pricing which maximizes the ratio of intake to expenditures. I would bet that they and other patent trolls have found that sweet spot long ago.
I was under the impression that some of these patent trolls are really just a collection of lawyers. If they're doing their own work, instead of getting an outside firm to do it, their costs should be much less.
I've long had the opinion that situations like this (as well as Intellectual Ventures) are the lawyerly version of hacking. They're just trying to find free lunches in the system the same way that MIT computer heads 50 years ago were trying to disable timeshare accounting for their usage.
By defining costs that way you do bring down the overhead, i.e. what they have to pay up-front, but not necessarily the actual costs.
If I am a lawyer doing my own patent trolling, and that takes up 10 hours of my time that I could otherwise have sold to someone for $x/hour, then $10x is a cost associated to the patent trolling, even if I didn't actually have to transfer that money to someone else.
Even so, if they hit up the victims for $100 instead of $10000, they'll need to send out far more letters, and deal with far more targets who simply ignore the letters. IANAL, but I believe it does cost money and time to actually file a lawsuit and/or compel the targets to do things like pay up under penalty of law.
Note that in the majority of cases, they don't file a lawsuit. Their business model almost certainly depends on that. You're right, of course, that their volume would have to increase, but I'm not ready to immediately dismiss the notion that their current tactic is not the most efficient.
I find it extremely dubious that you could actually infringe on a patent merely by using a consumer product. Disregarding this particular patent, is that sort of claim actually grounded in fact?
Well, if the product's manufacturer has licensed the patent, then the "exhaustion doctrine" generally keeps the patent holder from taking a second whack from people who bought it. That's what ordinarily shields end-users of consumer products from this kind of nonsense.
If the manufacturer hasn't licensed the product, though, the users may well be fair game, in the eyes of the law.
But end users generally don't know and have no way of knowing what technology is inside a product. That seems pretty sketchy. While it's true that unintentionally infringing on a patent is not an excuse, if I'm liable for someone else's infringing without my knowledge my potential liability is completely unlimited.
Whether it's grounded in fact has never been relevant because the in-court legal costs will far outweigh settlement -- that is the business model of patent trolling.
I think the point Jon's making is that a business is a lot more likely to swallow a $75 fee than a $200,000 fee. If you hit me with a $200,000 licensing fee I'm a lot more likely to hire lawyers to retaliate and really make you work for it.
The patent trolls should really read Joel Spolsky's guide on pricing enterprise software. Saving $200,000 is worth hiring some lawyers to fuck you up. Saving $75 isn't.