Patent Trolls by the Numbers

Abstract

Following President’s Obama remarks and reintroduction of the SHIELD Act, Congress is holding hearings on patent trolls (aka patentsanta assertion entities or PAEs) on March 14, 2013. One question concerns the prevalence of patent troll demands and other troll metrics, on which I have previously reported. These statistics draw heavily upon proprietary research as well as my own analyses, so, in the interest of full disclosure, this blog post lays out the numbers as I see them, and what I know about them:

* PAEs brought 62% of 2012 patent litigations * In 2012, PAEs sued more non-tech companies than tech companies * In 2012 PAE defendants comprised 59% of all patent lit defendants * 55% of unique PAE defendants makes $10M or less * ~16 publicly financed PAEs * Some high impact PAE patents (9 out of 10) fit the “buy and sue” pattern

What is more important than just the numbers however are the equities - how benefits and harms are distributed and their justice or injustice – that is why there is so much heat on the PAE issue – because people who are sued say they had no ability to anticipate or avoid it. While the liquid patent market is a positive development that has also helped small companies that buy or sell patents, addressing the existing apparent inequities, especially if they continue to spread to sectors that otherwise have very little to do with patents like retail, is likely to drive patent reform.

Keywords: patents, litigation