56 percent of all patent lawsuits are made by patent trolls

ZDNet ^ | 4/11/13 | Steven J. Vaughan-Nichols

[LibWhacker]

Summary: According to a new, comprehensive report by Lex Machina, more than half of all patent lawsuits in the US now come from patent trolls.

Patent lawsuits are used as weapons in business wars between companies such as Oracle vs. Google and Apple vs. Samsung. Behind the intellectual property (IP) headlines, however, Lex Machina, a Silicon Valley startup, has found that patent troll lawsuits have increased from 24 percent of cases filed in 2007 to 56% in 2012.

According to the Electronic Frontier Foundation, a "patent troll uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas." They collect their patents for pennies on the dollar from companies down on their luck. Since the Patent & Trademark Office (PTO) has a bad habit of issuing very broad patents for ideas that are neither new nor revolutionary, it's easy for a patent troll, which typically has no other business, to send out threatening letters to anyone who might conceivably infringe their patents. These letters usually threaten a lawsuit unless the alleged infringer agrees to pay a licensing fee. These charges can range from tens of thousands to hundreds of thousands of dollars.

Patent trolling is a very successful business.

Lex Machina, which started as a Stanford University Law School and Computer Science department project, has found that:

"Cases filed by monetizers [i.e. trolls] rarely proceed to trial, usually settling early in the case. 75 percent of terminated cases filed by monetizers ended in a settlement, as did 72 percent of terminated cases filed by operating companies. Less than 1 percent of monetizer cases were decided at or after trial, and less than 2 percent of monetizer cases were decided on summary judgment. Of the summary judgment cases, the authors did not find a single decision in which the monetizer prevailed. Of the trial determinations, monetizers won half of the time, though this represented only 0.3 percent of all terminated monetizer cases."

That's actually worse than it sounds. You see, most patent troll shakedowns never get to trial. Lex Machina states, "Much monetization behavior, such as bargaining, posturing and payment, concludes without any party filing a lawsuit." As a result, the authors conclude that "increasing anecdotal evidence suggests that patent litigation represents only the tip of the iceberg, and that the vast majority of patent monetization activity never progresses to the point at which a patent infringement lawsuit is filed."

Eben Moglen, professor of law and legal history at Columbia University, and the chairman of Software Freedom Law Center, agreed with Lex Machina's conclusions. "I think they are consistent with the experience of those who work in the area," said Moglen, "They show why community defense [such as the Open Invention Network patent defense consortium] is so important, and why in the end it will be so effective at preventing rent-seeking behavior by these entities."

Why do businesses pay rather than fight? Because it's cheaper to pay up than fight. By 2008, the average patent judgment had risen to a mind-boggling $17.8-million. The cost of losing has only gone up since then. True, as Lex Machina has shown, the odds are vastly against you losing; but even if you win, it's costly to fight a patent troll.

The American Intellectual Property Law Association reported in 2011 that if you defend against a less than $1-million patent shakedown, your total legal bill will average $650,000. The costs, of course, only shoot upward as the amounts go upward. Matthew Bye, Google's senior competition counsel, wrote on April 5 that patent trolls cost the U.S. economy nearly $30 billion a year.

With numbers like that, is it any wonder that so many Android companies have settled with Microsoft rather than fighting their patent claims in court? Is it really so surprising that so few companies, such as RackSpace, are taking patent trolls head on?

The only real solution is a total reform of the utterly broken patent system in the US. Patents were meant to encourage innovation. Today, they only discourage it.

[visualops]

how many people hire scum sucking lawyers to go on Disability

The system is basically set up so that you generally need an attorney to get results.

[FreeAtlanta]

Real intellectual property, yes, but the trolls who haven’t had an original thought in their lives? No.

I haven’t been victimized by one of them, but I have had friends get stung by them and I see the damage they do across the economy.

These people are no better than the phoney invention companies that are set up just to steal money from people.

[FreeAtlanta]

The really ironic thing about Obamacare is that malpractice will have to be reformed or cancelled. Now, the Democrats who are owned by trial lawyers also own Obamacare. Whatever will they do?

[usconservative]

What I'm curious to know is: How many of these lawsuits are open-source patent trolls?

Any business/organization that incorporates open source software into their software is at risk of being sued by it's creator.

Won't say which bank I work for, but we've had a fairly high number of patent-troll lawsuits filed against us in the last several years. Some for direct usage of the code, others for "duplicating functionality" of code we'd not even incorporated into our own software or even looked at.

Patent trolling is big business alright.....

[bone52]

There is no morality in saying someone should cede their property to the common good of society. What you are arguing for is common ownership of intellectual property, which is very Occupy Wall Street of you. Since we are feeling so progressive, why don’t we also take away excess profits and outrageous salaries that are putting an “undue” burden on society and give them to the common good as well?

You speak of “grabbing up” a liquidated company’s IP assets as if it is a repulsive act. But isn’t that what happens when any company is liquidated, their assets are sold? Don’t we want a company’s assets to be liquidated so that investors and lendor can receive some repayment? Also, the companies who are upset with the trolls could also bid on these IP assets.

If you don’t care about investors and lendors when a company is liquidated, are you ok with what the Feds did to the Chrysler and GM investors and lendors in the “bankruptcy?”

The point of this all is that you are calling for lower protection of IP rights than any other property, and you haven’t made a principled argument for why this should be done. Further, your “solution” appears to be to no different than a majority of other Marxist solutions - steal property.

Finally, there is no morality in law, only people who effectively use law to their advantage. What the trolls do is no different than what anybody else does except that the trolls (by virtue of being non-practising) don’t violate anybody’s property. They are merely protecting and trying to get a return on their investment in their property.

[impimp]

I reject the sentiment in your post. What about the speculators? They haven’t, for example produced a drop of oil in thier lives and they don’t use the oil providing goods and services to people - are they scum too?

[SkyPilot]

The really ironic thing about Obamacare is that malpractice will have to be reformed or cancelled. Now, the Democrats who are owned by trial lawyers also own Obamacare. Whatever will they do?

A large part of why Obama pushed for "ObamaCare" was racial.

Look at that chart and examine some of the entities "Office of Minority Health." "Office of Civil Rights."

The driving force behind this scheme was to take health care from "them" and "give" it to "our people."

I heard Moochelle Obama say as much during a televised speech. I tried and tried to find that speech, it went down the rabbit hole of the presstitute's cover up.

I am sure there will be plenty of lawsuits for the Democrat scum sucking lawyers to do, and lots of whitey's to bring legal action against.

[varyouga]

I don't deny there are issues with the system but how do you propose people who are crippled for life by malpractice get funding for the lifetime care they will now require? In other developed nations with lower healthcare costs the state would normally pay for it (through higher taxes).

With our system, at least you can assign blame to bad doctors/hospitals and shut them down if too many complaints occur.

I had a close family member who was having a stroke brought into the ER within 20 minutes of calling 911. After the EMTs dropped her off, the doctors “forgot” about her for over 12 hours. She passed out in the waiting room and began bleeding out of every opening in her head. No medication, no evaluation, nothing. It was all caught on video. Taking 10 minutes to give her oxygen and a dose of anticoagulant medication upon arrival would have prevented most of the damage. She lives 2 blocks from the hospital and all her medical records were already there.

Luckily she regained consciousness but is now completely paralyzed. I'm demanding they pay for the lifetime 24hr care/supplies she now requires and revoke the license of all doctors involved. Hospitals have their own lawyers who will try to weasel themselves out with a technicality, even when obviously wrong. We have no choice but to hire our own lawyer to fight them.