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Trolls at the High Court?

33 Pages Posted: 25 Oct 2012 Last revised: 2 Jan 2015

Christian Helmers

Santa Clara University - Department of Economics

Luke McDonagh

City University London - The City Law School

Date Written: September 23, 2012

Abstract

This article investigates the phenomenon of litigation undertaken by Patent Assertion Entities (PAEs), often referred to as ‘patent trolls’, within the legal system of the Patents Court (PHC) of England and Wales during the period 2000-2008. Our analysis shows that patent suits involving PAEs at the PHC are rare – they account for less than 6% of all patent cases. We suggest two reasons why the PHC does not provide a welcome venue for PAE litigation. Firstly, the majority of patent cases which reach a judgment in the UK result in a ruling invalidating the patent. Secondly, the costs regime in the legal system of England and Wales requires that the losing party pay the costs of the other side. In other words, even if its own costs are kept low, a PAE which loses a case may have to spend a substantial amount of money in order to cover the costs of the other side. When taken together, it is likely that these two aspects discourage litigation by PAEs at the PHC, which accounts for the low volume of cases when compared with other jurisdictions such as the US. We also offer interesting insights to the wider debate concerning whether it is likely that in the near future there will be a similar increase in PAE litigation in Europe as has already occurred in the US over the last decade. This article also discusses potential implications for the design of the proposed European Unified Patent Court.

Suggested Citation

Helmers, Christian and McDonagh, Luke, Trolls at the High Court? (September 23, 2012). LSE Legal Studies Working Paper No. 13/2012. Available at SSRN: https://ssrn.com/abstract=2154958 or http://dx.doi.org/10.2139/ssrn.2154958

Christian Helmers

Santa Clara University - Department of Economics ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

Luke McDonagh (Contact Author)

City University London - The City Law School ( email )

London, EC1V OHB
United Kingdom

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