Patent Trolls Account For 40 Percent Of All Patent Litigation, Study Shows

October 11, 2012, by Mandour & Associates, APC

Los Angeles – A new study has revealed that 40 percent of all patent litigation in the U.S. in the past year was filed by non-practicing entities, also known as patent trolls, which amounts to double the proportion of patent cases such entities filed five years ago.

The study, soon to be published in the Duke Law & Technology Review and made available online on Oct. 7, was authored by Robin Cooper Feldman of the University of California Hastings College of Law, Sara Jeruss of Lex Machina Inc. and Joshua W. Walker of the Intellectual Property Litigation Clearinghouse.

The study was completed at the behest of the Government Accountability Office, which Congress told in 2011 to study the effects of patent trolls on patent litigation, as part of the patent reform-minded America Invents Act. The study refers to trolls as “patent monetization entities,” or simply “monetizers.”

Such entities were also heavily represented among those filing the most lawsuits, with trolls accounting for four of the five parties who filed the greatest number of lawsuits in the last five years, the study shows.

Universities, meanwhile, which are sometimes considered non-practicing entities on the theory that they do not make any products, accounted for only a miniscule 0.2 percent of the first-named plaintiffs who filed lawsuits in the period studied. The number rises slightly when second-named plaintiffs are included, but remains quite small, the authors said.

The study also shows that cases filed by patent trolls are unlikely to advance very far in the trial process, and are often settled prior to the summary judgment phase of litigation.

“The data confirm in a dramatic fashion what many scholars and commentators have suspected: patent monetization entities play a role in a substantial portion of the lawsuits filed today,” the study says.

The study’s results are even more striking, the authors say, considering the fact that it only looked at patent infringement disputes that reached the courtroom.

“From all appearances, lawsuits filed are only the tip of the iceberg, and a major operating company may face hundreds of invitations to license for every lawsuit,” the study says. “Much of the bargaining, posturing and payment concludes without any party filing suit. Thus, one can only imagine the magnitude of the impact that patent monetization has on the patent system, and on the economy, as a whole.”