By Mark Gibbs,
Over the course of 2012 the issue of patent trolls came up with monotonous regularity.
If you’re not familiar with this phenomenon, according to an article, “On ‘Patent Trolls’ and Injunctive Relief“, by Alexander Poltorak, the term “patent troll” was:
… first coined by Intel, whose in-house counsel was quoted to have said, “A patent troll is somebody who tries to make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced.
These patent trolls make money (and lots of it) by threatening to sue companies who are using intellectual property that the troll has ownership of.
Given that the average cost of fighting this kind of case is around $2 million and will take about 18 months, most companies that get threatened feel it’s easier to simply pay the trolls to go away. The patent trolls are, in effect, completely legal financial terrorists.
There are rare exceptions where people just don’t want to give in to the trolls. Last year one of these exceptions was Drew Curtis, the founder of the news service Fark.com, whose TED presentation, “How I beat a patent troll,” is definitely worth watching.
Exceptions aside, patent trolls mostly get their way and a paper, “The Direct Costs from NPE Disputes” by James E. Bessen and Michael J. Meurer of Boston University, School of Law, published last June estimated that patent trolls …
…accrued $29 billion of direct costs in 2011. Moreover, although large firms accrued over half of direct costs, most of the defendants were small or medium-sized firms, indicating that [non-practicing entities] are not just a problem for large firms.
Read the rest at Forbes