Patent trolls now behind most patent infringement lawsuits

Patent assertion entities, which seek licensing fees rather than create products based on the technology, filed about 62 percent of the patent suits this year, according to a new study.

Patent trolls are for the first time behind the majority of patent infringement lawsuits filed in the United States, according to a study conducted by a patent law professor in California.

About 62 percent of all patent lawsuits filed this year up to December 1 were brought by patent assertion entities (PAEs), which are created to extract licensing fees from other companies rather than make products based on the patents, according to Colleen Chien, a law professor at Santa Clara University.

That's a dramatic increase over last year, when 45 percent of patent lawsuits were filed by trolls. In 2010, PAEs filed 29 percent of all patent infringement lawsuits, Chien found.

The study also found that 61 percent of defendants had been sued by a PAE that had sued eight or more times. Startups are a particularly popular target, with more than 20 percent of companies lacking any funding when finding themselves on the receiving end of a patent lawsuit.

The report noted that most patent fights are not conducted in public, with the vast majority being settled under nondisclosure agreements before reaching the litigation stage. One factor might be the fact that legal costs exceeded the amount of settlement in the vast majority of cases.

The data was part of a presentation at a public workshop hosted today by the Justice Department and Federal Trade Commission to explore the impact PAEs have on innovation and competition.

The FTC has been particularly concerned lately about the effects of threatened patent litigation, arguing in a recent court filing that Motorola's attempts to ban the sale of iPads and iPhones allegedly infringing on Motorola patents "risks harming competition, innovation, and consumers."

A study released earlier this year found that patent infringement lawsuits in general are on the rise, costing U.S. companies $29 billion in 2011. The explosion in patent lawsuits, especially in the software and pharmaceutical industries, led one judge presiding over high-profile cases to declare that " patent protection is on the whole excessive and that major reforms are necessary ."

 

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