Will Patent Trolls kill ther own Golden Goose?

Geometric Progression of patent trolling (Source: Scientific American)


We've been writing about how broken the Patent system - especially the US one - is for some time. Now patent trolls are now 61% of all US patent lawsuits - Reuters:

For the first time, individuals and companies that do not themselves make anything - commonly known as "patent trolls" - are bringing the majority of U.S. patent lawsuits, according to a study by a California law professor. The sharp increase in this type of lawsuit serves as a milestone likely to exacerbate the tension over patent issues and increase calls for patent reform and scrutiny of the system.

This year, about 61 percent of all patent lawsuits filed through Dec. 1 were brought by patent-assertion entities, or individuals and companies that work aggressively and opportunistically to assert patents as a business model rather than build their own technology, according to a paper by Colleen Chien, a law professor at Santa Clara University. That compares with 45 percent in 2011 and 23 percent five years ago....

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About 35 percent of startups that have raised $50 million to $100 million have been sued on a patent, Chien said, as have 20 percent of the companies that have raised $20 million to $50 million.

The other side of the coin is that many of these companies do try and ride over real patent owners:

....many patent litigants who do not make products or develop technology think of themselves in a better light. Many of them represent inventors, sometimes university researchers, who often cannot afford to defend patents on their own.

Even so,the cost of filing a patent is many orders of magnitude lower than the cost and risk of setting up a technology business. The cost of setting up and running a Patent Troll business is negligible compared to that of actually starting a productive business, which is why its such a growth industry. The problem is the the risk and rewards are massively skewed here.

Of course, as we have argued for some years, many tech patents shouldn't actually exist (just type "patent" in this site's search function...) as they are not much more than a paper napkin idea turned into a patent, or are so everyday that prior art is everywhere - yet the US system lets them through. - a view which Technology heavyweights are now putting some muscle behind (interesting development).

Be interesting to see how long it takes to break this, as any ecosystem where nearly 2/3 of all patent challenges are by non-players is unsustainable, and killing the golden goose is seldom a good survival strategy - especially if a lot more than the trolls aneed the goose to live. Probably needs some form of law around risk sharing - ie original patent owner gets xxx% of revenues after $yy sales, so it can be factored in to any business plan.