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THE PATENT TROLL PROBLEM 2017-07-15T19:24:15+00:00

The Patent Troll
Problem

A patent troll, or Patent Assertion Entity (PAE), is a company that acquires patents to be used solely to file lawsuits against other companies.

Most PAEs don’t use their patents to create products or build businesses. The great majority of PAEs exist only as a means to drive revenue through litigation.

troll-34-percent
compounded annual growth rate in litigation by PAEs using acquired patents.1
troll-84-percent
of all high-tech patent lawsuits filed annually are filed by the patent trolls.2

A big problem that isn’t going away

PAE-generated lawsuits have been a problem for businesses for decades. Of late, however, the sheer number of suits filed by PAEs has skyrocketed.

troll-fewer-than-1percent
of all defendants in PAE suits are ultimately found to have infringed a valid patent.3
troll-dollar-cost
…but the cost of defense is so high that more than 87% of defendants choose to settle before trial.3

Undeniably frivolous

Patent trolls know that defending a lawsuit is expensive. They typically will sue companies they know will settle rather than risk a trial.

troll-50-percent
of companies that have been a defendant in PAE litigation had less than $10 million in annual revenue.4
troll-10k
companies have been sued at least once by a PAE.5

Your company is a target

It doesn’t matter what you make or sell – PAEs will target any operating company if they think there’s a chance to make money.

  • $80
    Billion

    drained from the U.S. economy by patent trolls each year.6

  • troll-percent-hand
  • troll-more-3.2-million

    the average cost of defending a patent troll lawsuit.7

They can literally
bankrupt you…

Having a patent troll file suit against your company can be profoundly disruptive to your business. For small companies, these lawsuits can be lethal.

  • $211
    Million

    less spent on R&D by firms that are forced to pay patent trolls.8

  • icon-justice
  • 171
    Lawsuits

    brought against Apple alone between 2009 – 2013.9

Or completely disrupt
your business

Even if your company is able to successfully defend itself against a patent suit, you’ve likely had to pull your staff off other projects and invest in outside council, which eats away at your resources.

  • 80%+

    of patents litigated by PAEs are acquired from operating companies.10

  • icon-handshake
  • Nearly
    1000

    companies have transferred patents directly to PAEs in recent years.11

With friends like these…

Trolls have to get their patents from somewhere. The majority of them come from your other operating companies.

LOT Network can help

Contact us to see how our unique approach to the Patent Troll problem
prevents PAEs from viewing your company as a viable target in the first place.

Another Perspective on Patent Trolls

John Oliver, from Last Week Tonight with John Oliver,
recently did a memorable segment on Patent Trolls.
Definitely worth a watch.

demitris memos

We joined LOT Network recognizing its growing ability to protect against patent trolling and enable companies to get on with the business of innovation. We want to spend our time creating useful products for the shipping markets we serve, rather than wasting it engaged in meaningless legal disputes over patents.
Demitris Memos, Managing Director
MarineTraffic

troll-wikimedia-foundation

The Wikimedia Foundation believes in free and open access to knowledge. As part of that goal, we make our own innovations open source. We believe that membership in LOT furthers our goal by ensuring that open-source innovation is protected, allowing us to focus on serving our community with the best experience possible.
Wikimedia Foundation
1 RPX data, 2004-2016.   2 Jakel, K., Deter NPE Patent Litigation, IP Counsel Café Conference, Palo Alto, CA April 2015.   3 John R. Allison et al., Patent Quality and Settlement Among Repeat Patent Litigants, 99 Geo L.J. 674, 694 (2011).   4 Chien, C., Patent Trolls By the Numbers, Patently-O, March 14, 2013 (http://patentlyo.com/patent/2013/03/chien-patent-trolls.html)   5 Bessen, J., The Evidence is In: Patent Trolls Do Hurt Innovation, Harvard Business Review, November 2014.   6 Bessen, J., Ford, J., Meurer, M., The Private and Social Costs of Patent Trolls, Boston University of Law Working Paper No. 11-45, November 9, 2011.   7 Jakel, K., Deter NPE Patent Litigation, IP Counsel Café Conference, Palo Alto, CA April 2015.   8 Bessen, J., The Evidence is In: Patent Trolls Do Hurt Innovation, Harvard Business Review, November 2014.   9 Hughes, N., Patent ‘trolls’ hit Apple with 171 lawsuits in last 5 years, apple insider, August 28, 3013 (http://appleinsider.com/articles/13/08/28/patent-trolls-hit-apple-with-171-lawsuits-in-last-5-years)   10 McCurdy, Dan, Patent Litigation and Market Trends, IP Counsel Café Conference, Palo Alto, CA April 2015.   11 McCurdy, Dan, Patent Litigation and Market Trends, IP Counsel Café Conference, Palo Alto, CA April 2015.