Report Shows Patent Trolls Are Thriving

eldavojohn writes "The 2009 Patent Litigation Study has been released by Price Waterhouse Coopers. It shows evidence that patent trolls are growing and doing quite well. Using a very conservative view of a non-practicing entity (referred to as NPE in the report), PWC noted that 'damage awards for NPEs have averaged more than double those for practicing entities since 1995' and 'certain federal district courts (particularly Virginia Eastern and Texas Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards.' The report paints a dire picture of the state of patent lawsuits and especially those brought by NPEs and also shows that in the past eighteen years the number of patent cases filed yearly is on the rise significantly when normalized against the number of patents granted yearly."

Comments

"...shorter time-to-trial..."

[John Hasler]

Is favorable to both sides. It's especially favorable to the defendant if a preliminary injunction is issued.

Re:"...shorter time-to-trial..."

[eldavojohn]

Is favorable to both sides. It's especially favorable to the defendant if a preliminary injunction is issued.

I'm not a lawyer but there's an article from Sunday about Dallas firms specializing in 'tricky, rocky terrain' of patent litigation to be hired out in the Eastern Texas District Court ('Rocket Docket') cases listed in the report.

Now, pay attention to this part of the article

'Rocket docket'

The Eastern District, which includes Collin County and much of eastern Texas, has won a reputation as extremely plaintiff-friendly and a preferred venue to get patent claims through quickly.

Just getting a case into the Eastern District – known by some as the "rocket docket" because its comparative lack of criminal cases lets judges move civil patent cases swiftly – has prompted some companies to settle quickly.

Nguyen says the district's reputation as friendly to patent plaintiffs is widespread; whenever it's mentioned at law conferences around the country, she hears the same reaction.

A case against you that you found out about last week has just gone to trial in Eastern Texas and you need to be there to represent yourself even though you're based out of New York City. The reputation of the court is a bias toward the plaintiff and on top of that they have the Dallas firm that specializes in winning patent cases ... now, quickly, you need to decide to settle or fight this.

Sound fair to you?

Disgusting

[HEbGb]

It's a real shame that the patent system has been able to be manipulated so effectively, to siphon hard-earned money from real companies, and real inventors, into the pockets of these parasites. They're nothing but a drain on everyone. Lemelson's legacy lives on!

I'm glad this is getting some attention, though.

Don't Abbreviate

[whisper_jeff]

Don't abbreviate it to NPE. Spell it out, each time - non-practicing entity. By just saying three letters, it weakens the point that these companies do nothing. They exist solely to sue. They are the personification of what is wrong with the patent system. Make it clear that these companies are leaches that do nothing of good. They are non-practicing entities.

We may have issues when companies like (for example) Nokia and Apple wage patent warfare but both of these companies spend enormous fortunes on R&D and they both produce exceptional products. While the patent system may be borked, it exists so that companies like Nokia and Apple may exist and view R&D as a worthwhile expense. Patent trolls should be legislated out of existence. Don't produce anything using the patent? Bye bye patent. Your business model is built around "buy patent, sue everybody in sight"? Bye bye company. Start with that and we might get closer to a point where the patent system isn't a joke.

Non-practicing entity. Spell it out. Make it clear. Leaches who do nothing of value.

Re:Don't Abbreviate

[Grond]

Don't abbreviate it to NPE. Spell it out, each time - non-practicing entity. By just saying three letters, it weakens the point that these companies do nothing. They exist solely to sue.

Right, because universities, individual inventors, and non-profit research organizations do nothing and exist solely to sue. Oh, wait, those are actually common examples of non-practicing entities. For example, in the article the chart of damage awards exceeding $100 million lists 4 NPE plaintiffs, one of whom is an individual inventor (a doctor who invented a kind of drug-eluting stent) and another is Cornell University.

Re:Don't Abbreviate

[devnullkac]

Just goes to show that the US generally values the ability to convince people that something is true over the ability to discover that something is true. Time and again we see that marketing, fear mongering, and legal tactics overwhelm reasoned arguments and hard work. Not that I would have the laws simply torn down to get at this devil (see A Man For All Seasons). We must take care in our approach to reform that we don't find ourselves adrift in a worse sea of argument and arbitrary assignment of winners and losers.

Re:Don't Abbreviate

[vadim_t]

For universities it's easy: as most of them benefit from public funds, they shouldn't be able to patent anything and release it all under the public domain for the public's benefit.

Re:Don't Abbreviate

[Rogerborg]

Let's say I invent something

Let's not, until you do. Can you name three patents for inventions in the past 20 years that were filed by Joe Basement which were subsequently abused by Evil Incorporated? And when I say "abused", I mean that you can show that they only started to design Widget X after the patent had been published, rather than that they were developed co-incidentally?

Three examples from the past 20 years, and I'll cede you the point.

Re:Don't Abbreviate

[jandrese]

It costs the public more, but you also get a benefit: namely patent free technologies that can be incorporated into products far and wide. It is actually a public good to have more technology available to entrepreneurs who would make the best use of it, instead of just to large corporations who can afford the up-front costs of licensing the dozens of patents they need to tie together to make a new product.

Then again, I'm also one of those crazy people who thinks the Public Domain and Fair Use should be greatly expanded for the same reason. All of the great men of the world did their work standing on the shoulders of giants, and we have been letting the system stifle that for too long IMHO.

Re:Don't Abbreviate

[Anonymous Coward]

That is a bad idea, because that would cause universities to only research what makes the most money, not what is best for humanity.

Re:What I want to know is...

[bschorr]

It would probably be pretty easy to fake that though. Create some bogus plans to produce the thing you're patenting but never actually go through with it. It would be too costly to follow-up on every patent to make sure people actually did what they said they would.

Plus there are folks who get patents who don't intend to actually produce the thing themselves, rather they want to license it to others. Sort of an "R&D Department for Hire" concept. Unfortunately it's a fine line between those who intend to license their patents and those who intend to lay in the weeds and wait for somebody to infringe their patent and then sue.

It's those kinds of parasites we need to figure out way to deal with.

Cheers to Non Practicing Entitites!

[BooRolla]

This is great! The only way these things changing is if the game becomes to costly for the corporations who write the rules. I hope "NPEs" start putting more companies through the wringer.

Sounds harsh but consider this: If I independently created something useful and it blows up like Facebook or Google but infringes on some minor or trivial patent for IBM/MS/Apple/Etc, the fruits of my labor will be taken from me.

God bless the NPEs for taken advantage of the game created by the advantaged.

Re:What I want to know is...

[grasshoppa]

I'm probably alone in this, but if the patents were of significant value, I wouldn't have a problem with the "trolls".

The problem is that they are not of significant value. Usually, they are trivial extensions of existing technology which are inevitable. Thus, they are worthless to exploit directly, but if you wait for someone else to exploit it you can derive more value from them. That's the problem that needs to be fixed.

Re:What I want to know is...

[russotto]

There are a few research institutes that make money by licensing research, though. Would they be considered non-practicing entities? Because that does seem like a legitimate use of the patent system.

It's legitimate if they're actually doing research. It's not legitimate if they're just brainstorming a bunch of ideas based on the current state of the art and then patenting everything which comes out of the brainstorming session.