Patent trolling nearly doubled in five years, study finds

Suing others over patents is big business, and a new analysis done by Hastings College of the Law shows that it nearly doubled among patent holders without products in five years.

It's no secret patent lawsuits are on the rise, and it turns out the same can be said for the ones filed by what have affectionately been called "patent trolls."

According to a new study published today by University of California Hastings College of the Law, lawsuits filed by patent trolls -- or as they are re-categorized "patent monetizers" -- saw a dramatic increase between 2007 to 2011.

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 that five-year period, pulling out 100 lawsuits a year that were picked by random.

"Lawsuits filed by patent monetizers have increased from 22 percent of the cases filed to almost 40 percent of the cases filed, and the increase has occurred in only five years," the study said.

The overwhelming majority of those cases settled and never went to trial, it added.

Other major findings include the fact that four of the five most lawsuit-happy patent holders from the data were considered patent monetizers as opposed to companies with existing products and services.

Non-practicing entities, or NPEs, means a company that licenses patents but doesn't actually have any other business. Informally, such companies are known as patent trolls. The study suggests they be called "patent monetization entities" instead, since it "best captures the phenomenon developing in the modern patent market."

The study notes that the America Invents Act, which passed last year and led to the creation of the look at the 500 suits, added rules that make it harder for these patent monetizers to file complaints against several defendants at once. As a result, the study suggests, companies in the business of making money off patents could have "rushed" to file cases before the law went into effect, potentially throwing off 2011's data.

The findings come as technology giants, including Apple, Google, and Microsoft, meet in Switzerland to discuss patent litigation reform at a roundtable with the U.N.'s International Telecommunication Union. It's a very relevant topic given that some of technology's biggest players have gone toe to toe over software patents in courts around the world -- most notably Apple and Samsung in a trial with an aftermath that's yet to shake out, but has already put Samsung in the hole for $1.05 billion in damages, per a jury decision.

 

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