Research: Patent Trolls Costs U.S. Businesses $29 Billion Last Year

According to a research paper from Boston University, patent trolls costs U.S. companies and other organizations a staggering $29 billion last year. The study analyzed the effect of intellectual property rights claims made by organizations that own and license patents without producing related goods of their own. Some would say that this is the very definition of a patent troll: a company that buys or licenses patents with the express purpose of litigating its way to financial success.

The research covered companies that called themselves "non-practicing entities" (NPEs), which includes businesses that buy patents to license them out, individual inventors, universities, and companies that assert patent rights unrelated to the products they make.

The study found that the direct costs included legal and license fees. The study's authors, James Bessen and Michael Meurer from Boston University's school of law, said that there are other charges that the study didn't document. This means that their study only reflected part of the serious impact patent trolling has.

"This [$29bn] figure does not include indirect costs to the defendants' businesses such as diversion of resources, delays in new products, and loss of market share," the authors wrote. "Even so, the direct costs are large relative to total spending on [research and development], which totaled $247bn in 2009, implying that NPE patent assertations effectively impose a significant tax on investment in innovation."

You can read more on this topic in this BBC article.

Source: BBC

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  1. 0
    ZippyDSMlee says:

    All the more reason to force them to either be clear and concise with what can be patented or force them to linesce the IP for 60% of its profit in order to skip this whole mess. Exclusivity in IP is not worth giving lawyers more money to make make things more complicated to stifle competition and innovation.

  2. 0
    Mrxknown_JG says:

    And why is “businesses that buy patents to license them out” a bad thing? They legally own the patents and try to find people with the skills (and desire) to utilize the patent.

    I would assert that ONLY “companies that assert patent rights unrelated to the products they make” would be patent trolls.

    Also, not every intellectual property rights claim is a waste of money. People have to file lawsuits in order to keep their current patents. If they don’t they could lose them.

    Some are merely defensive in order to protect their property.

    However, a company like Motorola that files a lawsuit against Microsoft 6 years after the Xbox 360 launches is kind of dubious. Still I hope Microsoft burns for it.

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