Re: Ok, you've lost me @nextweek
There are big advantages for both parties.
In most patent licensing arrangements, the patent owner agrees to provide resources to defend the licensee from cease & desist and infringement suits.
In an openly defensive move like this, obviously designed to defend against a specific threat (Apple in this case) you'll often find a sliding scale style of arrangement where more and more of defensive costs are moved to the licensee, but the total dollar amount budgeted for the case is double.
It's an effective mechanism for providing double the litigious fun. The costs incurred in such an arrangement can be booked as a licensing issue, not a strictly 'legal department' issue, and as such have a different effect on the financials of both defending companies. It's a bit of bookkeeping voodoo, but it's a legitimate practice.
Such arrangements usually share, on the same sliding scale as defensive costs, the costs of offensive countersuits with any resultant awards split in proportions that reflect each parties investment. Again, a bit of financial voodoo. The hoped for funds from offensive efforts are booked as offsets to the defensive costs and until there is a definitive resolution to all the the related suits, each company has 'officially' spent zero, or close to it, money.
There are other advantages to these deals as well. The views of a partners legal team are just as useful as an outside team looking at anything, it's a extra set of competent eyes. But the biggest advantages are how the costs of legal defense and contractual defense can be booked in different ways that allow you to forestall any required disclosures that could negatively impact your financials.
Why do you think IP cases drag on so long? It's because you often don't have to reflect the financial impacts until it's settled :)
Biting the hand that feeds IT
