12 October 2012

Almost Half Of Patent Law Suits Are Trolls: Study

The media is abuzz with Patent law suits every other day, where companies are fighting each other out in courts over patents.  

It is thought that the patent suits are fought by companies who are in to product manufacturing based on patents, but a new study brings astonishing findings to light—four out of five biggest patent litigations are turned out to be patent trolls. The patent trolls are entities whose primary motive is to make income from licensing and litigating patents.

The study was conducted by US Hasting professor Robin Feldman and two coauthors Sara Jeruss of Lex Machina and JoshuaWalker of Simpson Thacher & Bartlett LLP. The published report on “Patent Trolls” or which is re-categorized as “Patent Monetizers”, revealed surprising increase in patent trolls between 2007 and 2011.

Suing others over patents is turning out to be a huge business, as it can be seen that patent suit winner ends up with loads of cash. The recent patent spat, where Apple sued Samsung over patent infringement, San Jose federal court judge, Lusy Koh awarded Apple nearly $1.05 billion. So rise in patent wars are obvious in US.

As part of a research project put on by the Government Accounting Office, the law school teamed up with legal tracking and analytics tool Lex Machina to break out a cross-section of 500 lawsuits filed during  five-year period, pulling out 100 lawsuits a year in random. The research found that, lawsuits have increased from 22 percent to 40 over five years. And majority of these cases were settled out of court, and never went to trail.

Non-practicing entities(NPEs) are the companies which are not in to the business based on their patents, but licenses the patents to other companies, this system is informally called as patent trolls, however the study coins word “Patent Monetizers” because it captures the phenomenon of development in modern patent market.

The study reveals that there is increase in number of patent suits in the wake of “America Invents Act 500″ which added rules that make patent monetizers to file complaints against several defendents at once.

Meanwhile the findings are published, the tech titans, like Apple, Google, and Microsoft, meet in Switzerland on a roundtable discussion about patent law suit reforms at U.N.’s International telecommunication meeting.

The new reforms over the patent litigation may reduce the recent heated up patent wars in US.