Research to be published in Science on April 29, 2016 shows how cash-hungry patent trolls are squelching innovation when the American economy depends on it more than ever. What should be done?
The new study, co-authored by Professor Lauren Cohen of Harvard Business School, Professor Umit Gurun of the University of Texas at Dallas, and Dr. Scott Duke Kominers, a Junior Fellow at the Harvard University Society of Fellows, examines the sharp rise in patent litigation in the United States during the past decade, with 2015 marking one of the highest patent lawsuit counts on record.
In theory, the rise in patent litigation could reflect growth in the commercialization of technology and innovation, as lawsuits increase proportionately as more and more companies turn to intellectual property (IP) protection to safeguard their competitive advantages. In reality, however, it’s a very different story. The authors point out that the majority of recent patent litigation has been driven by “nonpracticing entities” (NPEs) – firms that generate no products but instead amass patent portfolios just for the sake of enforcing IP rights.
Cohen, Gurun, and Kominers discuss new, large-sample evidence adding to a growing literature that suggests that NPEs—in particular, large patent aggregators—on average act as “patent trolls,” suing cash-rich firms, seemingly irrespective of actual patent infringement.
Patent trolling has a negative impact on innovation activity at targeted firms. Cohen, Gurun, and Kominers estimate that after settling with NPEs (or losing to them in court), companies on average reduce their research and development (R&D) investment by more than 25 percent. These results, Cohen, Gurun, and Kominers say, indicate a need to change U.S. intellectual property policy, particularly to screen out trolling early in the litigation process.
Although since 2010 the U.S. Congress has considered more than a dozen bills aiming to reduce patent trolling, most of the proposed policy changes focus on after-the-fact punishments for bringing lawsuits that are declared to be frivolous (or “extraordinary”) after court proceedings.
For example, H.R. 9, the “Innovation Act,” which is currently on the docket, provides for mandatory fee-shifting for patent lawsuits that the courts determine are not “reasonably justified.” In reality, however, the average costs of patent litigation are large ($1 million to $4 million) and the process is drawn out. Even with the prospect of post-trial fee shifting, patent litigation targets may thus find it cost-effective and less disruptive to simply settle with NPEs, even in unfounded lawsuits. According to the authors, this is not a sufficient solution.
So what should be done? Cohen, Gurun, and Kominers say that policies should screen out trolling at or before the time of patent assertion. The authors recommend advance review procedures that would provide preliminary evaluation as to whether the plaintiff’s infringement claims are reasonable, and whether the asserted patents are of high quality. Such advance review could cripple trolling, they conclude – pre-litigation review can separate good NPEs (and, more generally, good patent lawsuits) from bad. Legitimate infringement claims will be encouraged, whereas trolling will be screened out. This would greatly benefit innovative companies and help them propel the U.S. economy to greater heights.
The Latest on: Patent Aggregators
via Google News
The Latest on: Patent Aggregators
- WISeKey International Holding Ltd Reports Preliminary Nine Months 2019 Resultson October 17, 2019 at 10:00 pm
Expansion of patent portfolio with new IP and patents with the aggregation of 39 IoT / Semiconductors patent families (more than 200 patents in total) to its portfolio (https://www.wisekey.com/patents ...
- NetworkNewsBreaks - Quest Patent Research Corp. (QPRC) Subsidiary Alleges Patent Infringement by Apple Inc.on October 17, 2019 at 12:57 pm
Quest currently owns, controls or manages more than 115 patents across 11 intellectual property portfolios ... is an information service that provides (1) access to our news aggregation and ...
- Apple Reveals Touch ID under the Display will use Sensors that consist of Optical Imaging Arrayson October 10, 2019 at 5:05 am
The patent states that the finger could be statically positioned ... The optical imaging array can be used by the electronic device for any suitable imaging, sensing, or data aggregation purpose ...
- OLED patent aggregator suing Apple over implementation of every screen it useson September 12, 2019 at 10:34 am
A firm that aggregates patents on OLED tech has sued Apple over a wide array of products, alleging that despite not making its own OLED screens, Apple is responsible for the infringements. The patent ...
- Vubiq Networks awarded a new technology patent for wireless communicationon September 10, 2019 at 4:34 pm
The patent, numbered EP2737718B1 ... The elimination of all inter-rack copper or fiber cabling – as well as the elimination of all aggregation and core switches – is combined with higher throughput, ...
- No Need to Debate It—Alice Losing Clout in Patent Caseson July 11, 2019 at 12:13 pm
The defensive patent aggregator’s data shows that since the U.S. Court of Appeals for the Federal Circuit issued two decisions in 2018 that tweaked the law of patent eligibility, so-called Alice ...
- Posts Tagged: patent mass aggregatorson May 11, 2019 at 3:13 am
In the last decade, a substantial market has begun to develop for contingent fee representation in patent litigation. Wiley Rein — a traditional general practice law firm with … ...
- The growing problem of patent trollingon February 3, 2019 at 4:00 pm
This is not what we find. The cash-targeting that we observe is primarily the behavior of large patent aggregators—not small inventors (8). There has not been an increase in patent litigation among ...
- The New Patent Intermediaries: Platforms, Defensive Aggregators and Super-Aggregatorson December 31, 2017 at 4:50 pm
And new intermediaries that we call defensive patent aggregators and super-aggregators have become quite influential and controversial in the technology industries they touch. The goal of this paper ...
- Apple Countersues Qualcomm for Patent Infringement Related to Snapdragon Chipson November 29, 2017 at 6:13 am
At the time, Qualcomm alleged that Apple infringed on six Qualcomm patents related to carrier aggregation and technologies that were designed to allow iPhones to save battery life while communicating.
via Bing News