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US Patent Trolling Costs $29 Billion a Year
New submitter Bismillah writes "This piece of research from Boston University seems to put an end to claims that patent trolling is 'socially valuable,' and instead is a social loss. 'We estimate that firms accrued $29 billion of direct costs in 2011. Moreover, although large firms accrued over half of direct costs, most of the defendants were small or medium-sized firms, indicating that [non-practicing entities] are not just a problem for large firms.' The total cost to society could be around $80 billion, according to the researchers. What's more, the costs have gone up fourfold since 2005."
...because the potential entrepreneur expects that if they become successful, a patent troll will take all their money?
If patent litigation was limited to inventors and the users of the inventions, and commodities derivatives were limited to actual producers and consumers, I suspect we would see a sudden reduction in income inequality. But it isn't going to happen, because the accumulation of wealth with the entrepreneurs gives them too much control over law and its enforcement.
(I am using entrepreneur in the literal sense of a middleman who seeks to profit without adding value; its meaning has been extended to "people who start productive businesses", which is part of the devaluation of linguistic currency that has helped getting us into this mess.)
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
How do I link this story to another headline? http://news.slashdot.org/story/12/06/27/028249/high-frequency-traders-are-the-ultimate-hackers-says-mark-cuban Essentially, it's the same ethic at work - making money by gaming the system. For high frequency traders, it is exploiting technological loopholes. For patent trolls, it is exploiting legal loopholes. Talk about a shadow economy - what happens to the U.S. economy if and when these nefarious practices are ended?
I'm in agreement with you. But I'm posting as AC, for a variety of reasons. Namely, I am a patent attorney. I specialize in software patents and handle both prosecution and litigation. I also used to be a software developer, so I'm sensitive to the problems that software patents can cause.
So, with that being said I might be a little biased, but the reality is that I think most people would have way less problems with software patents if there were no more NPEs. The vast majority of patent litigation in the electronics/software industry is done by NPEs. While it does happen, you don't generally see the big firms suing the little guys. They typically sue each other, see,e.g.,Google, MSFT, Apple, and Samsung. If they want to see each other, who cares.
I think for there to be a workable NPE rule, you would have to limit the assignment of patents. It would be too unworkable to determine whether the company "practices" the patents. It would leave too much to interpretation. Moreover, it would be used to limit the scope of the patent to the items being practiced, which is not the idea of a patent. My rule would work like this:
1. Can only reassign in cases where your company or line of business is being sold
2. For a company to assert a patent they must show revenues from sales (other than licensing revenues)
3. You are on the hook for Attorney fees if Def wins on non-infringement (invalidity is more tricky, since its somewhat of a crapshoot anyway)
3. There would be an exception would for the original inventor/assignee, who need not show anything (they could essenttially by an NPE, if they wanted). They would still be on the hook for Attorney fees.
These are simple black letter rules, that would probably stop the vast majority of NPE suits.