Patent trolling costs $29 billion annually in the US

If you've spent any reasonable period of time on the Internet, you'll no doubt be familiar with 'patent trolls': companies who mount defences against other companies over patents they own, yet do nothing with.


Although advertising the fact just makes you look like a douche.

Their reason for having these patents is merely so they can profit from having them breached. They don't even have to attempt to produce a related product in order to profit from someone else making the product successfully. We know patent trolls are expensive to deal with, but you could be surprised just how expensive they are from year-to-year.

A study from Boston University tries to go the distance and measure just how expensive patent trolling has been in the United States.

During 2011, 2150 companies created a total of 5842 defences against patent trolls. Paying their legal team, and also funding other legal costs isn't cheap. Companies lost an estimated $29 billion dollars in direct costs, such as legal and licensing fees. The figure could be higher still, as the study didn't estimate indirect losses. Defendant losses in resource diversion, product delays and loss of market share were not factored in, so it can be assumed the cost is actually much greater.

The issue here is that it proves patent trolling works. Since 2005, the losses generated via patent trolling have multiplied by nearly five. In 2005, companies lost roughly $6.6 billion dollars in direct costs. Again, indirect costs were not being considered. Even the number of patent trolling incidents has increased. In 2005, there were 1401 claims by patent holding companies. These companies have become known as trolls due to their methods of profiteering, and their disinterest in putting their patents to good use.

Source: Boston University | Image: Zazzle

Report a problem with article
Previous Story

Bill Gates: Just giving a tablet to students won't help them

Next Story

The Art of Blizzard hardcover book coming in October

10 Comments

Commenting is disabled on this article.

Solution is really simple:
If you own the patent but you don't actually implement it, the patent becomes void.
This way the patent trolls can't do what they are doing at the moment.

Problem is though that patents are usually submitted way before they are genuinely used.. so what sort of time-cap do you put on it? A time cap would be a start though.. and even then patent trolls could get around it by just resubmitting it everytime it 'expires'.

Neobond said,
Problem is though that patents are usually submitted way before they are genuinely used.. so what sort of time-cap do you put on it? A time cap would be a start though.. and even then patent trolls could get around it by just resubmitting it everytime it 'expires'.

How about forcing them to prove their intent to use the patent?

Obviously some companies may try and get around it with half arsed implementations, but I'm fairly certain trying it repeatedly would lead to future claims being laughed out of court.

Nihilus said,

How about forcing them to prove their intent to use the patent?

Obviously some companies may try and get around it with half arsed implementations, but I'm fairly certain trying it repeatedly would lead to future claims being laughed out of court.

I would absolutely cheer for such a solution, as it's so depressing to see great ideas, wanting them implemented, then the company literally decides for EVERYONE to "never" have this anywhere (until the patent expires of course) just to slow the advancements in technology.

I absolutely detest that.

GS:mac

Nihilus said,

How about forcing them to prove their intent to use the patent?

Obviously some companies may try and get around it with half arsed implementations, but I'm fairly certain trying it repeatedly would lead to future claims being laughed out of court.


Perhaps the company(s) should have to pay a certain ammount of cash just to hold on to a patent and to encourage fair competition. Apple is one such company that just wants patents so if someone violates it, then they can sue for easy money. Patents should either be: Abolished or shared to be fair. make things better by sharing info so all can benefit.

Nihilus said,

How about forcing them to prove their intent to use the patent?

Obviously some companies may try and get around it with half arsed implementations, but I'm fairly certain trying it repeatedly would lead to future claims being laughed out of court.

In the UK, AFAIK you have to build a prototype before applying for a patent.

A-star said,
Solution is really simple:
If you own the patent but you don't actually implement it, the patent becomes void.
This way the patent trolls can't do what they are doing at the moment.
Actually the solution is even more simple than that: we kill the Apple...