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Originally Posted by AlienQ
Hows this fighting make you money? It don't...
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You are correct, it don't.. but that's not why over a dozen top-notch companies are "blowing" the profits from their companies to think their defense will "make them money". Fighting and winning could save money.
Sometimes, you need to take a stand and if you have the bankroll to do so, then you can make a difference. Some companies don't like it when someone tries to ram patent licenses up their a**.
This is probably how you are looking at it:
Think about the margins and play along with your own home version of this game (numbers are guestimated and can be tweaked to your guesses):
- Assume a paysite makes 1M in gross revenue a year
- A paysite pays out about 60% of their gross to affiliates
- Overhead expenses (hosting, b/w, employees, advertising, etc) about 25% of gross
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Gross Profit $150,000
- Acacia's 4% licensing on GROSS revenue (1M x 0.02) = $40,000
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Net Profit = $110,000
The 4% GROSS turns out to take 26% of Net Profits
(i forgot to factor in taxes as well, but you get the picture).
So that's $40K / year and growing for licensing. After 5 years, total payout would be a minimum of $200,000
So besides the whole "moral" issue of taking a stand, it makes economic sense to fight (as long of course that you win.. and the defendants will win).
Fight the Analysis!