Cost of Patent Trolls

In Study: patent trolls have cost innovators half a trillion dollars Ars Technica reports on findings of three Boston University professors who studied the economics of patent-infringement lawsuits filed by “non-practicing entities”–business entities that exist only to own patent portfolios and sue for infringement.  The cost for publicly-traded companies since 1990 is $500 trillion and lately has run at about $83 billion a year. The researchers used stock market event study analysis to calculate the cost.  Read the article to learn more.

Patent Abuse

In When Patents Attack!–truly a great title–This American Life devotes an hour to uses and abuses of software patents, focusing on Intellectual Ventures, a Silicon Valley company that exists to acquire and enforce patents through litigation.  Outsiders view Intellectual Ventures as a patent troll–“a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered (by the party using the term) unduly aggressive or opportunistic, often with no intention to manufacture or market the patented invention” (I am perfectly comfortable citing Wikipedia for this definition).  Intellectual Ventures disagrees.  It’s a provocative episode if you have any interest in intellectual property and cutting-edge issues in patent law.  One criticism is that it leaves the impression that ideas themselves can be patented, when patent law protects the manifestation or implementation of an idea but not the idea itself.  As I said last night in class you cannot patent the idea <mousetrap>, only a particularly-described method or process for catching mice.  (“Use peanut butter” is not particular enough.)  The episode does address how software patent claims are often overbroad, throwing a net over far more than is legitimate, and I recommend it notwithstanding my criticism.