I'm planning a new software company that will license software to businesses. A lot of R&D will be needed to create the software and indeed, our codebase will be our biggest asset. Unfortunately our domain specialism is a minefield of thousands of existing patents - and there is a risk that, should we become successful, we will be attacked by patent trolls alleging unintentional infringement.
I want to create some sort of suicide pill that will protect my company against being sued for patent infringement. Let's say in three years time we have $50k in the bank, $1M annual revenue from loyal customers and $5M of intangible IP realised in our codebase. We're approached by a patent troll who sends us a list of patent numbers which have varying relevance to our work. Since he's asking huge amounts for licensing fees and damages, should he win a lawsuit, he'd win all our assets including our codebase. We need something to scare him off, and a suicide pill may be just the thing.
I'm trying to dream up legal constructs that give me such a suicide pill option. My best idea so far is that losing a patent suit would trigger the poison pill which would do two things:
- My startup would no longer have rights to the codebase. So the troll can't get his hands on it.
- The codebase would be automatically released to the public under an open source license. This means that the code lives on and gives the startup team the opportunity to build a new business upon it. Alternatively, the developers themselves, or another legal "phoenix" entity acquires rights to the source code so that the business can be reborn.
Is there a legal structure that could achieve something like this? One idea is that the developers themselves own the code copyright and license it to the company. The license would contain the poison pill. Or perhaps structure as two companies - a service company employing the developers that contracts to the customer-facing, branded main startup that builds source code into SDKs and is responsible for all patent licensing.
Sorry for such a rambling question - I hope I've made clear enough what I'm trying to achieve. All thoughts very welcome.