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Los Angeles Business Litigation Attorney | Patent Trolls Now Account for a Majority of US Patent Lawsuits, Study Says

  • By: Robert Klein

TED (Technology, Entertainment and Design) is a set of conferences from the non-profit Sapling Foundation that was formed to disseminate “idea worth spreading.” Past speakers have included former president Bill Clinton, Bill Gates and numerous Nobel Prize winners. In June 2006, the presentations became offered for free viewing online, and last month, the TED Talks had been watched one billion times worldwide. On November 14, 2012, Business Insider included the presentation a video from Drew Curtis, the founder of the news aggregator website Fark.com, on its list of “6 Brilliant TED Talks That Every Business Leader Should Watch.”

In his talk entitled “How I beat a patent troll,” Curtis talks about how Fark and companies such as Yahoo, MSN, Reddit, AOL and TechCrunch were sued by a patent troll “for the creation and distribution of news releases via email.” You can hear the audience laugh in response to that claim, but Curtis says his eight-person company was determined to fight the lawsuit. “I had hoped to team up with some of these larger companies and defend against this lawsuit, but one by one they settled out of the case even though not one of these companies infringed on the patent,” Curtis says in the video.

Curtis explains that this occurred because the average defense against “patent trolls” costs $2 million and can take 18 months if you win. We post this now because a study by Santa Clara University law professor Colleen Chien found that roughly 61 percent of all patent lawsuits filed through December 1 of this year “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 Reuters, this compares with 45 percent in 2011 and 23 percent five years ago. “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,” Reuters reported.

Chien told Reuters that the finding was “pretty dramatic,” and said it means that more lawsuits “are being brought by entities that don’t make anything than those that do.” Chien also told Reuters that the lawsuits are increasingly hitting startups, with about 35 percent of startups that have raised $50 million to $100 million, and 20 percent of the companies that have raised $20 million to $50 million having been sued on a patent.

We stressed the importance of eliminating “patent trolls” in an April blog post about patent reform, and Chien’s study confirms that companies suing on patent infringement grounds despite not having anything to do with the pants not only remains a problem, but is actually getting worse. You can find additional information about intellectual property litigation on our website. If your company is dealing with a “patent troll” or has concerns relating to the current patent system, contact our firm at (323) 405-1002 or fill out the form located on this page to let our Los Angeles business litigation lawyers review your case.

Klein Trial Lawyers – Los Angeles business litigation attorneys

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.