Trolls at the High Court?
Santa Clara University - Department of Economics
City University London - The City Law School
September 23, 2012
LSE Legal Studies Working Paper No. 13/2012
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.
Number of Pages in PDF File: 33
Date posted: October 25, 2012 ; Last revised: January 2, 2015