“It almost goes without saying that when you are a startup, one of the first things you do is you start setting aside money to defend yourself from patent lawsuits, because any successful company, even moderately successful, is going to get hit by a patent lawsuit from someone who’s just trying to look for a payout” — Charles Duhigg
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In this quote, Charles Duhigg seems to be conveying that startups should anticipate and budget for the likelihood of facing patent lawsuits from those seeking to profit through litigation rather than legitimate patent disputes. Some key points:
- Duhigg states that setting aside money for potential patent lawsuits is something startups should do almost immediately as a precaution.
- He notes this is because even moderately successful companies will “get hit by a patent lawsuit from someone who’s just trying to look for a payout” – implying opportunistic litigation not aimed at enforcing valid patents.
- The quote implies that as startups achieve traction or revenue streams, they become targets for lawsuits intended to extract settlements from companies, not protect legitimate intellectual property.
Overall, Duhigg appears to be advising startups to prudently plan and budget for the virtually inevitable prospect of dealing with nuisance patent lawsuits aimed at generating payouts through legal pressure rather than addressing real infringement concerns, according to his perspective gained from experience with such predatory litigation practices targeting companies once they attain a certain scale or profile. Being prepared financially is important given this risk environment according to the view conveyed.