01 January 2008

Patent Trolls Statistics, will Europe escape the trolls?

Patent Troll Tracker tracks patent litigation. Read their year end’s "rundown on some numbers concerning patent litigation". The Troll Tracker looks at the Fortune 100 (top 100 US companies in terms of revenues) to see who got sued the most for patent infringement, and found that the top 35 companies were sued a combined 500 times for patent infringement in the last two years alone. TechDirt refers to this amount as “an awful lot of money wasted on lawyers that could be going towards actual innovation”. However, I wish there is a clear 1-to-1 relationship between patents and innovation. Intuitively we think of innovation unthinkable without patents. However, history has shown that innovation is achieved in areas where patents are rare or seldom used.

Patent Troll Tracker uses the term “non-practicing entities” or NPEs defined as “entities that don't make any products”. PTT asserts that of the lawsuits over the past two years, approximately 50% came from NPE’s. However, in the last 3 months, according to PTT, “that number shoots up to 70% from companies that don't make products. And if you limit the list to tech companies, 80% of the lawsuits came from companies that don't make products”.

TechDirt wonders: “shouldn't this be ringing some alarm bells?” We have a similar contemplation: Will 2008 bring the same troll trend in Europe? We already reported a few times on Sisvel, Europe’s largest patent troll. However, the American companies that focus on patents, whether they qualify as a NPE, such as Gemstar, the newly acquired patent troll of Macrovision, may use 2008 to assert their patents in Europe based on the use of various electronic programming guides. 2008 also show an increase in NPE patent assertion activity in Europe, no doubt. Would be interesting to see if anyone in Europe, like PTT, can do some research on this.


Hermes said...

What a waste of money! Is there any legislation against spurious patent claims?

I'd be inclined to make the loser always pay all costs in these cases, as that would soon change the approach :-)

Unknown said...

Well I think they are coming to Europe - and have been here for some time. E-Data have tried to litigate their patent on downloading images and music from the Internet.

The creation by CreditSuisse and Deutsche Bank of "patent funds" to purchase unused patents also indicates that money is entering the European market to finance litigation.

Indeed there may be some advantageous in litigating in Europe compared to the United States. A number of European countries provide repayment of legal fees to the winning part. Germany's system of basing the refund on the "value-in-dispute" also means that the patent holder can reliably budget for a loss

Anonymous said...

Readers do please correct me if I see it wrong, but isn't Europe a place where what the party asserting the patent needs is a claim that not only covers the accused embodiment but also strikes the viewer as likely to resist validity attacks that, to succeed, need only rise to the balance of probability. Then, even when you win, times 3 punitive damages are not achievable. All these factors would drive any right-thinking troll to settle rather than litigate. Where the atmosphere is a poisonous mix of low legal certainty and nonsensically high damages, and the litigators run on contingency fees, that's where the trolls prosper.

Duncan Bucknell said...

I agree with Anonymous and, with respect, slightly disagree with Rob.
In the US, NPE's almost never have to pay any of the defendant's attorney's fees. All they have to do is cover their own. In Europe, this isn't the case, as we all know.
This is a big factor, and together with wilfulness and contingency firms creates a mix which is ripe for NPEs which doesn;t exist in Europe.
So, for what it's worth, I think that while these differences remain, the level of 'troll' or NPE activity will always be much lower in Europe than in the USA.

I've posted this over at IPThinkTank as well so that my readers can have the benefit of this interesting post and comments.