If you’ve read these pages for a while, my telling the story of patent trolls has become known where a small no name company which has no products of its own pay the $35 dollar filing fee and threatens lawsuits against larger companies who they claim are infringing on its portfolio of broad patents. As this scenario has become so much the norm these days the media doesn’t even try to cover all the cases however there are many blogs popping up which do (should you be interested).
However what is interesting here is not the number of pages the parasitic pursuit fill for the drama loving media yet the real cost both actual and intellectual. As three Boston University researchers have published a detailed empirical study of the costs patent trolling brings us and the number is astonishing as our patent trolling friends have cost publicly traded defendants (typically our employers) $500 billion since 1990. Folks with this said, this $500 billion out our pocket as the consumer as you think this just cut into corporate profits? To make matters worse, the researchers point out the problem has become more severe in recent years as in just the last four; the costs have jumped to an average of $83 billion per year. So as we can see this isn’t pocket change, nor a hobby as it has grown to outright legal extortion. As the study goes on to say that this amount is “more than a quarter of US industrial research and development spending during those years”.
As here software patents accounted for approximately 62 percent of the lawsuits, while only a mere two percent of the lawsuits involved drug or chemical patents, and six percent involved mechanical patents. With this the researchers showed that, outside the minor percentages for the chemical and pharmaceutical industries, the cost of patent litigation had already begun to exceed the rewards to inventors by the year 2000.
The reason this study is so important is these results show the patent system which is suppose to reward companies who make investments in innovation inst working. As due to the growing “blizzard” of frivolous patent lawsuits against technology companies in particular, the patent system has become a net disincentive to innovation, especially software. Let’s hope our leaders in Congress and the Supreme Court are paying attention. Because if not we are assuredly on the short bus to second class hood as the rest of the world zips by with the top down laughing as we sit broken down alongside the information superhighway…