We've had the same thing happen to us, though in our case there was no attempt to negotiate beforehand or to buy us out: we found out we were being sued when the other company issued a press release about it. Classy. They're just trying to put us out of business through a combination of lawyer fees and scaring off potential customers. Thankfully, it's not working.
It's amazing how many resources lawyers suck up, and how long patent lawsuits last (we were sued in December 2007, and we're still nowhere near trial). It's easily the sort of thing that can cost millions of dollars to fight, which is obviously the sort of expense that can put a startup out of business.
However, I'm not too hopeful anything will get done about it any time soon: it seemed from the discussion the other day that the HN community wasn't even solidly against them, and if this kind of community isn't, then the anti-software-patent movement clearly isn't mainstream enough to make any kind of impact yet.
It's amazing how many resources lawyers suck up, and how long patent lawsuits last (we were sued in December 2007, and we're still nowhere near trial). It's easily the sort of thing that can cost millions of dollars to fight, which is obviously the sort of expense that can put a startup out of business.
However, I'm not too hopeful anything will get done about it any time soon: it seemed from the discussion the other day that the HN community wasn't even solidly against them, and if this kind of community isn't, then the anti-software-patent movement clearly isn't mainstream enough to make any kind of impact yet.