Patent trolls cost companies $29 billion in 2011

27 Jun

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Patent trolls — that is, entities that purchase patents in bulk and sue other companies for infringement despite not making any products of their own — have rapidly become the bane of the technology industry. But few could have imagined that patent trolling would cost companies a whopping $29 billion a year in expenses, as a new study from Boston University claims. Per Bloomberg, researchers at the BU School of Law have found that businesses paid that massive sum on 5,842 infringement claims filed in 2011 by non-practicing entities, the polite term that the legal community uses for patent trolls. 

The study conducted by James Bessen, a lecturer at the BU law school, and Michael Meurer, an economist and BU law professor, found that small businesses were particularly hard-hit by patent troll suits as the share of their income devoted to troll-led patent suits was far greater than the share that large companies had to pay to combat similar patent litigation. As Bloomberg writes, the two men think that “the study illustrates systemic problems in the U.S. patent system” and that “recent court rulings and legislation that scaled back some patent rights only go so far in curbing what they consider a costly nuisance for businesses.”

 

http://www.businessweek.com/news/2012-06-26/business-costs-quadruple-on-patent-owner-claims-bgov-barometer

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