So it's a straightforward defect-weighted prisoner's dilemma. The best option for any one party is to settle (regardless of what others do), but the best overall result would be for nobody to settle.
One solution to the prisoner's dilemma is for everyone to get together and give up the ability to defect, say by incorporating it into corporate bylaws. Another is to drastically change the cost structure, such as by insurance or a mutual contract that holds anyone who settles liable for a large amount. If not done carefully, either of these could tie a party's hands against legitimate suits, but they are alternatives (after a fashion).
Game theory has analyzed the prisoner's dilemma to death. If there's any hope for a grassroots solution, it's there.
Oh, I completely agree that in theory there are solutions to this problem. In practice, it's going to be difficult to get a group of companies to rip off their steering wheels when the game of chicken starts.
Perhaps a group of lawyers and actuaries should get some money together and create an anti-patent-troll company, viz., a company that sells patent troll insurance. They get a whole bunch of companies as clients, and contractually obligate them to litigate (via the insurance company) trollish patent suits. Centralize and incentivize.
One solution to the prisoner's dilemma is for everyone to get together and give up the ability to defect, say by incorporating it into corporate bylaws. Another is to drastically change the cost structure, such as by insurance or a mutual contract that holds anyone who settles liable for a large amount. If not done carefully, either of these could tie a party's hands against legitimate suits, but they are alternatives (after a fashion).
Game theory has analyzed the prisoner's dilemma to death. If there's any hope for a grassroots solution, it's there.