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

We waste far too much money on patent attorneys

Tech Culture

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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