Startup general interest

Patent trolls now 61% of US lawsuits

By December 12, 2012 3 Comments

This is a post with some horror stats about patents, courtesy of Broadstuff. Firstly as you can see from the chart above payouts to patent trolls are increasing at a rate that is pretty close to exponential. Secondly, Reuters reports that 61% of US patent lawsuits filed in the first eleven months of 2012 were filed by patent trolls, and thirdly 20% of startups that have raised $20-50m and 35% of startups that have raised $50-100m have been sued on a patent.

This is nuts.

To spell it out – more patent suits are now being filed by companies that don’t make anything than by companies that do make stuff, and 20-35% of startups whose raison d’etre is innovation are being penalised by the patent system rather than protected by it.

Add to that the billion dollar patent shenanigans at companies like Google, Apple and Microsoft and it isn’t surprising that over the last couple of years the White House has finally gotten round to focusing on the issue.

Reform won’t be simple. There are industries like pharma for whom the patent system works well, and as the Reuters article points out some patent trolls are representing legitimate inventors, but for me at least the case for change is overwhelming.

Closer to home the European Parliament has just created a unified European Patent scheme which will dramatically reduce the costs for businesses seeking to protect their inventions across Europe. As a reduction in the cost of doing business this is to be welcomed, but I imagine it will also lead to a rise in patent litigation, including by patent trolls. Ultimately patents are a global issue and I hope that the US is able to fix its patent problem and that the solutions are then copied over here.