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http://ssrn.com/abstract=1930272
 
 

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The Private and Social Costs of Patent Trolls


James E. Bessen


Boston University - School of Law; Research on Innovation

Michael J. Meurer


Boston University - School of Law

Jennifer Laurissa Ford


affiliation not provided to SSRN

September 19, 2011

Boston Univ. School of Law, Law and Economics Research Paper No. 11-45

Abstract:     
In the past, non-practicing entities (NPEs) - firms that license patents without producing goods - have facilitated technology markets and increased rents for small inventors. Is this also true for today’s NPEs? Or are they “patent trolls” who opportunistically litigate over software patents with unpredictable boundaries? Using stock market event studies around patent lawsuit filings, we find that NPE lawsuits are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010, mostly from technology companies. Moreover, very little of this loss represents a transfer to small inventors. Instead, it implies reduced innovation incentives.

Number of Pages in PDF File: 35

Keywords: patent, litigation, litigation cost, non-practicing entities, software patents

JEL Classification: O31, O34, K41

working papers series





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Date posted: September 19, 2011 ; Last revised: September 30, 2012

Suggested Citation

Bessen, James E. and Meurer, Michael J. and Ford, Jennifer Laurissa, The Private and Social Costs of Patent Trolls (September 19, 2011). Boston Univ. School of Law, Law and Economics Research Paper No. 11-45. Available at SSRN: http://ssrn.com/abstract=1930272 or http://dx.doi.org/10.2139/ssrn.1930272

Contact Information

James E. Bessen (Contact Author)
Boston University - School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
Research on Innovation ( email )
202 High Head Rd.
Harpswell, ME 04079
United States
617-531-2092 (Phone)
Michael J. Meurer
Boston University - School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-6292 (Phone)
617-353-3077 (Fax)
Jennifer Laurissa Ford
affiliation not provided to SSRN ( email )
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