Others have mentioned this, but this PatentSheield scheme is not useful against non-practicing entities (NPEs or "trolls). It is intended to be used by startups who are at risk of sued by big incumbants. For example, if an IoT startup participates in this program and is sued by an established IoT company, the startup can take title to the portfolio and counter-sue the incumbant for infringement of the portfolio patents. At that point, the companies agree to a cross-licensing deal and both parties live to fight another day.
This kind of arrangement is not useful for countering NPEs because NPEs are non-practicing by definition. Since they are non-practicing, you can't countersue for infringement.
Your note about cooperation between potential defendants is spot-on. The difficulty is in getting them to cooperate. Accused infringers are likely to be competitors who may not be inclined to cooperate. Further, it is to the advantage of each to simply license the patent and wait for another accused infringer to do the work to invalidate the patent, at which point they can all stop paying license fees. (A classic "free rider" problem.)
By the way, a company can buy patent infringement insurance that will pay for litigation or settlement costs, but it isn't clear that it is worth the premium.
This kind of arrangement is not useful for countering NPEs because NPEs are non-practicing by definition. Since they are non-practicing, you can't countersue for infringement.
Your note about cooperation between potential defendants is spot-on. The difficulty is in getting them to cooperate. Accused infringers are likely to be competitors who may not be inclined to cooperate. Further, it is to the advantage of each to simply license the patent and wait for another accused infringer to do the work to invalidate the patent, at which point they can all stop paying license fees. (A classic "free rider" problem.)
By the way, a company can buy patent infringement insurance that will pay for litigation or settlement costs, but it isn't clear that it is worth the premium.