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Patent Trolls – Crisis? What crisis?

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Troll_Bridge_by_BlazeTwoeIf you Google (other search engines are available!) the terms “patent troll” and “$29 billion” you’ll find a multitude of articles stating that patent trolls curb innovation and cost the U.S. $29 billion in 2011. You might be forgiven for concluding that there’s a big problem. You’d be right, though not for the reasons you might expect.

The $29 billion figure derives from a paper published by Boston University professors James Bessen and Michael Meurer and the conclusions drawn there were eye catching and provocative enough to be re-quoted in nearly every article that seeks to look at the issue of patent trolls (even the White House isn’t immune to regurgitating this figure – see page 9 of the White House Patent Report!). However, if you look a little closer (for example, here, here, here or here) you’ll see evidence that the Bessen & Meurer paper may be flawed with figures that are based on a biased sample, and a dodgy definition of NPE (non-practising entity) amongst other issues. And while we’re looking at numbers let’s be careful that the non-practising entity litigation problem is not overstated as well. As recently as September 2013, articles were quoting a statistic that NPEs were responsible for around 60% of US patent litigation last year. However, the recently published US Government Accountability (GAO) study suggests that, during the period 2000 to 2010, only about a fifth of lawsuits came from NPEs. Let’s hope that as the patent troll/NPE/PAE/acronym soup discussion develops the matter will be debated carefully otherwise we risk rushing to solve a problem that is either poorly defined or which might not even exist.

Mark Richardson 17 October 2013

The above article was first published on the 2 Paragraphs website (As the name suggests all posts to the 2 Paragraphs site are two paragraphs in length!). The original version of the article can be found here and I note that the IPcopy version has been modified ever so slightly from the originally published article.

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