Most Software Patent Trolls Lose Lawsuits
An anonymous reader writes "A new study is out concerning patent trolls and software patents, which found the rather surprising news that the most litigated patents tend to lose nearly 90% of the time. When broken down into different categories, patent trolls and software patents lose their lawsuits most often. While some may suggest this means 'the system is working,' that's not really true. The data suggests that most companies, when threatened with a lawsuit, end up settling or licensing to avoid the high costs of litigating. But the fact that so few software patents and patent trolls do well at trial may be more incentive to fight back. Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents."
I guess this means business will be falling off in Marshall, Texas...
Everybody gets what the majority deserves.
The problem is, in pharma or the car industry, patent threats get met by a legal team and a well-financed company, so patent holders don't launch as many spurious lawsuits. In software, where you don't need a legal team and a six digit bank balance, many developers get shafted because they can't use the court system. Patents shouldn't exist in domains where individuals and non-commercial entities can be mass producers.
swpat.org is a publicly editable wiki, help welcome.
Expert in software patents or patent law? Contribute to the ESP wiki!
Aren't ALL software patents bad?
You can lost most of the time, but when you win, can't the winnings quite overshadow the actual effort in trolling the system?
It's not completely unlike walking up to many random women and saying, "nice shoes, want to have sex?" Sure, the vast majority will think you are a schmuck and maybe even give you a slap, but to some having an extremely tiny percentage agree makes it worth their effort. ;-)
Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents.
What seems obvious is that the *majority* of ridiculous patents are, legally, bad patents. This doesn't seem to suggest that *all* bad patents are caught by the judicial filter. It's a minor nitpick, for sure, but I'm 100% certain that the number of "bad patents" that have held up in court is non-zero.
The secret to creativity is knowing how to hide your sources. - Albert Einstein
achieving a goal through large quantities of little to no work. of course most "attempts" at any measurable level will show likely failure.
With a success rate of 10% it must be certainly worth it.
Don't fight for your country, if your country does not fight for you.
While some may suggest this means 'the system is working,' that's not really true.
How in the heck would a 90% reject rate indicate "the system is working"? If that number is correct, that supports the idea that the U.S. patent system under our current legal system is stifling innovation. I.e. "the system is broken" is a more sensible conclusion. With that kind of failure rate on a challenge, the patent trolls simply must not care that the patent is weak. They expect targets to just roll over and settle most of the time. Business model:
1. Buy up patent with a domain applicable to targets with money. Patent needs only be domain relevant, not actually defensible.
2. Sue
3. Profit, no question marks needed.
All this suggests that we really need both legal reform and patent reform.
If the system was working, these patents never would have made it through in the first place for them to sue anyone with. :)
"Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents
Oh sure, I'll accept that they are bad patents, but I'm not going to accept that the law recognizes them as bad until Amazon's one-click patent is invalidated. Obvious ideas can be, and have been, patented, and that is a serious problem.
Qxe4
The data suggests that most companies, when threatened with a lawsuit, end up settling or licensing to avoid the high costs of litigating. But the fact that so few software patents and patent trolls do well at trial may be more incentive to fight back.
Of course we don't get a link to the paper itself, but the fact that where defendants decide their case is strong enough to go to trial, they tend to win, is not especially surprising.
OK, but what's the average return on investment for a successful patent troll lawsuit?
Turning that 90% figure on its head, if the average ROI for buying up a patent and sucessfully suing some suitably wealthy potential infringers in court is more than nine times the outlay then unfortunately being a patent troll is still a viable business model.
UNIX? They're not even circumcised! Savages!
Sure, just assume that 90% of the lawsuits brought by patent trolls lose at final judgment. You can't work backwards from that factoid and conclude that 90% of software patents are crap. After several levels of filtering, only then is a case decided. And at each level, if the software patent i strong, the process ends. Demand letter gets reviewed. Strong patent? Settle. Initial lawsuit gets filed. Semi-strong patent? Cost-risk analyze defending the lawsuit and license if the numbers don't work. Lawsuit continues. Weak but possible bad judgment? Settle. So only the patents that the defendant looks at and decides that the risk of losing the suit, cost of the suit, _and_ the strength of the asserted patent are such that it makes sense to risk a final judgment are these 90% losses representative. Hardly a basis for a universal declaration that all software patents are weak and unenforceable. Sure, folks may have a beef with the concept of software patents, but that is a separate issue.
I'll take what they're having.
I'm a little ashamed that in the US we immediately turn to litigation without considering other options such as mediation law. In the UK mediation law is the norm, whereas litigation is more of a last resort. But in Soviet Russia, software patents litigate YOU!
I love NetHack.
How suits fair in court is nothing of real importance - the importance is what percentage settle out of court. I'd want to see those stats - I would assume they are the exact opposite, if not higher.
All the proves is that defendents settle unless they have a case they believe has a 90% chance of winning.
90% of patent trolls defended against succeed. That does NOT mean that more people should defend themselves. Say 50% of patent claims are settled outside court, and we have the stat that 90% of patents that make it are successfully defended. What does this tell us about the success rate of the 50% that never make it to trial? Fuck all because of self selecting bias, this isn't a blind trial.
The majority of people in marathons do fairly well. That cannot be extrapolated to say that the majority of people would do well in a marathon. Its stupid. This study is no different.
Disclaimer: I didn't RTFA because stats scare and confuse me.
I have here a glass of dihydrogen monoxide just like they've had, and it can be YOURS for the low price of $60!
The fact is that the statistics are limited, and the most solid statistics are about final judgments, because it's hard to account for and classify all the settlements, especially if they don't involve a court.
The other solid basis is looking at some software patents yourself, ie empirical evidence.
It's not surprising - you'd need to have a bulletproof case before you actually challenged a case in court and ran up the huge associated cost. For everything else you'd just settle.
Ayjay on Fedang
Yes, I'll break out my vast fortune, right now... I mean it... I'm headed to be bank... You'll be sorry...
Patent trolls have a 100% success rate of draining your account... They should have to post a bond to pay your expenses if you win
For justice, we must go to Don Corleone
I'm writing some software for iOS. My lawyer told me last week that I should incorporate because of patent trolls. And he did TELL me in no uncertain terms.
Trolling is a art,
Can I have that in dehydrated form? Its easier to travel with.
The teachers will crack any minute, purple monkey dishwasher.
Last I heard (and I used to get and own patents, which I no longer care about) the flaw is this. You guys are missing it. It's up to the entity applying for a patent to find and disclose prior art. Period. If the examiner happens to know some and get back to them fine, but that's not how the system is set up. And the patent office runs off fees they don't get if applications aren't granted. Enough said?
Why guess when you can know? Measure!
I guess I just don't understand this. So it sounds like if it's the first dispute that goes to trial with a judgment, 47% of asserted patents are winners. IF you're a loser, and litigate 10 more disputes on the same patent, you'll win one of them.
Now, if the patent has been held valid elsewhere, what possible motivation would you have to go to trial instead of license? (Only that you don't infringe. Dangerous.) Aren't we really saying the courts have a 10% margin of error on patent litigation?
The probability of success is irrelevant if the expected value (success probability * average profit) is still positive.
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
Consider the scox-scam. The lawsuit was ridiculous from day one. There was no way scox could "own" UNIX. But, the scam is now well into it's eighth year, with no end in sight.
If, like IBM, you happen to have around $50 million to $100 million to defend yourself against a bogus lawsuit, maybe that's not a big problem.
But if you are a smaller company, like TomTom, it may be better to just cave in. Maybe it's easier for HTC to cave in to a bogus lawsuit. Those suits were not officially "won" at trial, but they were big wins for Microsoft. The scox scam was a big win for Microsoft as well.
The point of filing a bogus patent lawsuit is not to go to court, and actually "win" at a trial. You have basically "won" when the lawsuit was filed. The company you file the lawsuit against will have to give you something. It's like legalized extortion. Or, in the case of the scox-scam, you get eight years of FUD against your competitor for a relatively meager $100 million (hardly the cost of making a few TV commercials).
Once you step into a courtroom, check to see if you have a soul. If you do, then you're not a lawyer, and you've already lost.
If you were blocking sigs, you wouldn't have to read this.
All you scared of patent trolls little shops and devs...ever stop to think that if you ORGANIZED and paid into a pool, that you could be protected? Right off the bat, cross license all your patents, you might come out ahead of the big dogs like IBM and so on that way. Next, you'd be able to have top notch representation on tap, scary enough law teams to keep the trolls down, and if it came to a fiight, win.
but, you refuse to organize. Divided you fall, you get stomped on all the time. And it is only going to get worse and worse and worse.
Now, just so you don't get your typical white collar knee jerk reaction, DO NOT call it a "union", even though this is the strategy that can work. Call it something else, but DO IT.
If you can't get several thousand coders to start it here and on a few other major tech boards....well, buncha namby slack jawed whiners then. Talk up a storm, get all hissy fit indignant, then when push comes to shove, retreat into some video game escape from reality instead of organizing.
They system is NOT designed for you as little individuals and small shops, so until you realize this and act accordingly, you will keep getting screwed by the patent trolls. Want change, you need to be a big deal, something they can't ignore, something powerful.
Isn't this the little engine that could?
the human struggle?
Never going to give you up?
err, sorry, guess i'll leave the rickroll out of this.
Be seeing you...
because they are not correctly able to evaluate patents due to lack of training in the fields they are analyzing
As an aside to your main argument - I've seen this meme come up repeatedly, and I'm not sure where it started, though I suspect it's on the patent reform side: most anti-patent people seem to think that biologists are reviewing networking patents, and that GUI programmers are reviewing chemistry patents. Two words: Art Groups. The USPTO divides Examiners into groups based on their specific areas of expertise, divides applications the same way, and only has people working on stuff they're qualified on.
You can call it incompetence within their field, but don't claim that Patent Examiners are examining applications outside of the field they have training in. That's demonstrably false.
The JPEG standard (?) was put at serious risk because one company claimed it had a patent stake in the underlying technology. Turns out they had a bogus claim but not before they collected 105 Million dollars from hardware and software companies. Some 30 companies paid up. Of course when the USPO determined Forgent Networks (during a reexamination) withheld prior art from the application things went downhill. You can read about it in the Wikipedia JPEG entry.
When you hear hoofbeats, think horses, not zebras
“Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents.”
Who are you to say a patent is ridiculous--especially all of them?
Furthermore, defendants may tend to have deeper pockets with which to fend off patent holders--which makes sense, because why sue an infringer who isn't making decent money?
The problem with this study is that it ignores several key advantages enjoyed by patent trolls over their targets:
Finally, the study examined too few cases. How can we be sure that they didn't selected a weaker sample of patents than what is generally litigated? Could it be that many more patents never go to trial because they are strong enough to make defending infringement unfavorable for the defendants?
that's why they called trolls.
What a waste of time.
The costs aren't that high, I'm always curious why parties in litigation almost never file a re-exam.
http://en.wikipedia.org/wiki/Reexamination
The filing fees are low and anyone can supply prior art that they feel invalidates the patent it.
The backlog for re-exams isn't that long either.
Bring back the old version of slashdot.
In the case of Microsoft it seems to be the case anyway.
They have used the news of a competitor being sued for IP infringement in their own interests numerous times now. Just recently with Google and Oracle over the Android Java implementation.
Maybe if they concentrated on making their products better and gave people a genuine reason to upgrade then they wouldn't need so much FUD?
90% of software patents that went to trial were invalidated. Obviously, the ones that go to trial are usually the ones where the defendant has a high expectation of success, otherwise they'd just settle.
Nothing to see here, folks. Move along...
No comment.
Bad news for NPEs (patent trolls). The disclosure of the results of this study likely weakens their bargaining position, as more defendants learn that NPEs have a disadvantage at trial. It's starting to look like the ITC -- which has proven itself quite NPE-friendly, of late -- may be would-be trolls' best bet.