Feeds

Patent trolling cost the US $29 BILLION in 2011

Boston Uni researchers slam ‘NPE’ lawsuits

Secure remote control for conventional and virtual desktops

New research from Boston University suggests that “patent trolling” is a very expensive business, costing $US29 billion in 2011 in America alone, and that trolling reduces the funds available for innovation.

The research, by James Bessen and Michael J Meurer of the university’s School of Law, drew on information published in litigation databases and a survey of defendants to come up with the figure.

Their research found that there were more than 5,800 defences by 2,150 companies against patent assertions by “non practicing entities (NPEs) in 2011.

While high-profile cases – by NPEs the researchers describe as “big game hunters” – give the impression that patent trolling is mostly between giant corporations, the researchers noted that the median defendant had annual revenue of $US10.8 million, and 82 percent of actions were launched against companies with less than $US100 million in annual revenue.

The researchers also analysed the financial state of publicly-traded NPEs, and state that these trolls “cost small and medium-sized firms more money than these NPEs could possibly transfer to inventors”. The result, they say, is that there’s less money available for invention.

The researchers note that NPEs have a long history, and that not all of it’s bad. “Some inventors lack the resources and expertise needed to successfully license their technologies or, if necessary, to enforce their patents. NPEs provide a way for these inventors to earn rents that they might not otherwise realize, thus providing them with greater incentives to innovate,” they write.

Nor is trolling via NPEs a new phenomenon, they write, noting that “patent sharks” in the 19th century used to target railway companies and farmers. However, the rise in NPE trolling has “reached a wholly unprecedented scale and scope”.

It should be noted that this research focused only on the NPE business model – it didn’t take into account the increasingly bitter, frivolous and expensive patent spats between active vendors such as Apple, Motorola, Samsung and the rest.

The paper is available here. ®

Build a business case: developing custom apps

More from The Register

next story
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.