$30.4 billion, not $11.4 billion, in software patent damage to the economy

We waste far too much money on patent attorneys

End Software Patents earlier claimed that the US economy suffers an $11 billion hit each year due to needless software patents. It turns out that End Software Patents was wrong.

The number is actually $30.4 billion.

What's $20 billion between friends? The group revised upward its earlier, more conservative estimates based on the following [PDF]:

  • The U.S. Courts reported 2,830 patent lawsuits (of all kinds) filed in FY2006.
  • Bessen and Meurer estimate that as of 2002, 25% of patent infringement suits are over software; all signs indicate that the current number is much higher, but we must use the latest available data.
  • Bessen and Meurer use an inclusive measure of the costs due to software patent litigation that find a mean cost per suit of $43 million in current dollars.
  • Multiplying these together, we find costs of $30.4 billion per year due to software patents.

No matter how the number is calculated, the results are the same: needless, wasteful patent litigation that helps no one except attorneys.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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