You're very correct. It TPL had initially come out and made reasonable demands, I'm not sure all of this would be going on. I understand TPL's "patent on water" mentality, but other companies don't see it that way and certainly don't see it that way when a giant number is thrown at them without much justification.

The reality is almost all companies that are approached by TPL do an internal audit. They look to determine unit sales of potentially infringing product, the importance of the technology, potential workaround designs, alternate supply options and then finally a damages calculation. The company then determines a reasonable range of potential royalties that will need to be paid. That number is then compared against the figure asserted by TPL. If the numbers are ridiculously far apart, the company probably won't even bother talking to TPL.

I think TPL believed that it could send these barking dog letters with huge alleged damages to scare companies into coming to the table. Given that I thought the licenseing team was made of fairly experienced individuals, I'm surprised that TPL took the approach that they did. It's causing them to scramble at this point. That being said, with a little luck and the right process, TPL could potentially pull out a win. It isn't too late yet (although it's starting to get there).