Feeds

Patent trolling cost the US $29 BILLION in 2011

Boston Uni researchers slam ‘NPE’ lawsuits

Top 5 reasons to deploy VMware with Tegile

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. ®

Intelligent flash storage arrays

More from The Register

next story
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.