Guest Post – PAEs under the Microscope: An Empirical Investigation of Patent Holders as Litigants

Guest Post by Christopher A. Cotropia, Professor of Law and Austin Owen Research Fellow, University of Richmond School of Law; Jay P. Kesan, Professor and H. Ross & Helen Workman Research Scholar, University of Illinois College of Law; and David L. Schwartz, Associate Professor and co-Director of the Center for Empirical Studies of Intellectual Property at Chicago-Kent College of Law

 Today, a certain type of patent litigant—the non-practicing entity (“NPE”), also known as a patent assertion entity (“PAE”), patent monetization entity (“PME”), or simply patent troll—is the target of much public debate, if not venom. Indeed, President Obama himself got involved in this debate, with his Council of Economic Advisers preparing a report this summer entitled “Patent Assertion and U.S. Innovation.” The Executive Summary of the President’s report sounds the following alarm about PAE suits:

Suits brought by PAEs have tripled in just the last two years, rising from 29 percent of all infringement suits to 62 percent of all infringement suits.

This asserted explosion in PAE-initiated litigation has fed into a wider perception that PAEs are out of control and need reining in by Congress.  But is the factual assertion by the President’s report an accurate characterization of total PAE litigation activity? 

We address this important issue in our new article, Patent Assertion Entities (PAEs) Under the Microscope: An Empirical Investigation of Patent Holders as Litigants. To investigate PAE litigation, we personally hand-coded all 7,500+ patent holder litigants in 2010 and 2012. In our coding, we finely classified the nature of the litigants, going beyond the simple PAE / non-PAE label.  Specifically, we coded each patent holder as one of the following:  (1) a University; (2) an Individual Inventor/Family Trust; (3) a large Patent Aggregator (e.g., Acacia); (4) a Failed Operating Company or Failed Start-up; (5) a Patent Holding Company that appears unaffiliated with the original inventor or owner; (6) an Operating Company; (7) an IP Holding Company affiliated with an operating company; or (8) a Technology Development Company (e.g., Walker Digital).[1]

Based on our data, and contrary to the assertions in the President’s report, we do not find an explosion in PAE litigation between 2010 and 2012.  In particular, the President’s report considered only the raw number of lawsuits filed in 2010 and 2012. By limiting its analysis to numbers of cases filed, rather than the underlying parties involved, the President’s report was incomplete and led to an erroneous conclusion.

To understand the reason for this error in the President’s report, one must consider an important change to patent litigation made by the America Invents Act (AIA). The AIA, adopted in 2011, changed the joinder rules relating to patent litigation by prohibiting patent holders from including multiple, unrelated defendants in a single lawsuit based on commonly-asserted patent(s). Instead, after the AIA, patent holders must file separate lawsuits against each unrelated defendant. Thus, rather than focusing on the raw number of lawsuits as the President’s report did, a more appropriate inquiry should focus on the total number of patent litigants, both patent holders and accused infringers, in order to gauge more accurately the actual number of patent disputes between parties. Using this approach, we found almost no difference between 2010 and 2012 in the number of litigants in patent cases. In other words, the “explosion” of PAE litigation between 2010 and 2012 is simply a mirage.

First, in terms of raw number of patent lawsuits, our study reveals that the number of lawsuits did increase between 2010 and 2012, with a substantial increase in the raw number filed by non-operating companies (by which we mean the sum of all categories except operating companies).  Our first finding therefore is similar to the President’s report.  For example, while what we coded as “Patent Holding Companies” (“PHCs”) suits comprised 16% (400) of cases filed in 2010, they comprised 38% (1,959) in 2012, and this is in comparison to “Operating Companies” suits comprising 69% (1,750) of cases in 2010 to 45% (2362) of cases in 2012.  The bar chart below reports these findings along with those for all of the categories we coded: Figure 1

However, when we evaluated the number of litigants, rather than just the number of cases, the picture changed substantially. We considered separately both the number of unique patentees alleging infringement in 2010 and 2012 and the total number of alleged infringers in those years. For both, we found little difference between 2010 and 2012.  Our second finding therefore directly contradicts the statement in the President’s report that there was an explosion of PAE lawsuits in that time period.

Specifically, concerning the number of unique patentees starting litigation, the total number barely changed between the studied years, increasing from 1,610 unique patentees in 2010 to only 1,696 in 2012.  Further, the distribution among types of patentees stayed almost the same, with the unique number of PHC patentees slightly increasing from 13% (214) of all patentees in 2010 to 16% (266) in 2012, while Operating Company patentees dropped slightly, from 72% (1,156) of all patentees in 2010 to 69% (1,165) in 2012. The graph below reports all of the unique patentee numbers for the various categories.

Figure 2

And the number of infringement defendants (perhaps the best measure of the impact of patent litigation) corresponding to each category of patent holder also did not vary much from 2010 to 2012.  In particular, the overall litigation exposure from Operating Company suits compared to other types of patentee suits remained almost constant.  The number of defendants in Operating Company suits slightly dropped from 49% (5,708) of the total number of defendants in 2010 to 48% (5,611) in 2012.  And while the number of alleged infringers for other categories changed, the changes were slight.  For example, the number of defendants in PHCs suits rose from 27% (3,179) of all defendants in 2010 to 32% (3,698) in 2012 while the number in Individual/Family Trust dropped from 11% (1,320) in 2010 to 8% (927) in 2012.  The complete comparison of total number of parties excluding the patentee in 2010 versus 2012 is set forth in the graph below.

Figure 3

From this data, the only real change between 2010 and 2012, the increase in the raw number of lawsuits, is most likely driven almost entirely by a procedural rule change relating to joinder passed with the 2011 patent reform. These results call certain findings in the President’s report into serious question.

Information about lawsuit filings, obviously, cannot answer all questions about PAEs. There are other serious questions relating to PAEs that demand an empirical answer. For instance:

  • Ÿ What is the volume of patent demand letters? How many of those assert frivolous claims?
  • Ÿ Of the litigated cases, how many of the PAE (and non-PAE) cases are frivolous?

We do not know the answers to these questions (yet), and further rigorous empirical research is needed.

To aid the effort in understanding the patent litigation landscape, we have decided to release the underlying data—our specific classifications of the litigants in all patent lawsuits filed in both 2010 and 2012—to the public. We believe that releasing this data to the public, which unpacks the definition of PAE, provides better illumination to policy makers, researchers, and others interested in the patent litigation system.  This data is available to everyone to examine and evaluate at www.npedata.com

The full paper is available for download here. It provides a detailed analysis of the distribution of the 2010 and 2012 patent cases, including information based upon technology and litigant type.

We welcome any comments and suggestions on the article or the dataset.



[1] A more detailed description of the categories can be found on pages 13-14 of our draft article.

74 thoughts on “Guest Post – PAEs under the Microscope: An Empirical Investigation of Patent Holders as Litigants

    1. Hmmm, No mention of the GAO report – and only a one-sided mention of the FTC report….And a panel of witnesses is one-sided as well…Gee, this is just like the other AIA trumped up event (AIA inducing rise in filings – which by the way, 6 should get his time machine out (again) as that was something I predicted during the AIA process.

  1. The AIA is only one of several systemic changes that made it feel like there is more NPE enforcement. Another major system change was the Supreme Court’s Medimmune decision in 2007. See link to patentlyo.com… Ex ante Medimmune, a lot of patent enforcement/monetization was called “licensing” and was done outside of the court system. Medimmune changed the norm to “sue first, talk later.” Ex post Medimmune, patent owners felt the need to sue in order to avoid being DJed. As a result, what used to be a private licensing transaction now has additional overhead of litigation costs. The increased cost of the licensing transactions has to be paid by somebody. It seems most of this cost has been pushed to the licensees. Some patent owners may be benefiting from this, but it seems like the greatest beneficiaries are those who make money from patent litigation (e.g., defense counsel, ediscovery consultants, expert witnesses, and plaintiff’s counsel).

    1. I knew taking three years of Latin in high school would be helpful, I just didn’t expect it to be so much so in the comment section of a patent blog. “Ex ante” and “Ex post”, indeed!I think that private licensing quit working so well with the advent of “patents of dubious quality”. No one wants to take a license to a crap patent so they say “sue me”. And the trolls did. And then there’s the whole dust docket angle, and how tort reform brought an end to staggering judgments so there was a glut of attorneys on the market who suddenly needed another target. You’re so right…no matter what the outcome, the only real winners in any litigation are the attorneys.The deeper issue with trolls, however, is their behavior outside of court, pre-suit. This is a great question:”What is the volume of patent demand letters? How many of those assert frivolous claims?”Myself and others are trying to collect demand letter information to get a handle on what’s going on before the suits are filed. That’s what is going to tell the real story, in my and many others’ opinion. So we can argue all day about how much litigation has or has not exploded (http://iptrolltracker2.wordpre… as if it really mattered. I mean, it *does* matter, of course, but to what extent?Does the number have to be increasing by a certain percentage year of year for the there to be a problem? Any time a troll goes after a company for the express purpose of extorting fees from those who are not even likely infringing on a patent that is nebulous and weak and sorry to begin with, it’s bad. The actual numbers and metrics and data surrounding the phenomena are nice and all, but while the academics sit and argue that, the real world is out there trying to find solutions.Just sayin’,IPTT

      1. Great comment, Steph.Any time a troll goes after a company for the express purpose of extorting fees from those who are not even likely infringing on a patent that is nebulous and weak and sorry to begin with, it’s bad. The actual numbers and metrics and data surrounding the phenomena are nice and all, but while the academics sit and argue that, the real world is out there trying to find solutions.Indeed. Of course, we are being told now by the self-identifying “patent apologists” that the only “valid” solution to the problem is to fight patent trolls in court. That’s certainly a reasonable (and laudable) response when one has the time and money to spend on such endeavors. And the last thing the patent apologists ever seem to want to do is to assist the public (or anyone else) with the analysis of the typical junky computer-implemented method/system patent (a patent on a method of pouring a beer, however, will be greeted with apoplectic outrage and demands for “investigations” – go figure!). A more interesting question I’d like to see being addressed “statistically” is: who are the individuals running the PAE shells (and non-shells), who are the peole who they purport to “represent” (i.e., who are these alleged “little guys” who can’t otherwise assert their patents because they will be “crushed” by the deep pockets they want to grift off of) and who are the people who can’t stop defending their behavior? e.g., what is their net worth? what political organizations are they affiliated with? other than the swift issuance and enforcement of their patent rights, what other roles do they believe the Federal government should play in helping citizens pursue their happiness?I don’t expect any surprises from that kind of analysis but it would be nice to shine some light on these non-practicing “innovators” so we could understand why they are so deeply troubled by, e.g., the possibility that procuring and “monetizing” patents on software and other “computer-implemented” junk might be a less lucrative lifestyle choice down the road.

        1. Hello!All I know is, I asked IP Nav if they would be willing to share the names/inventions of these “little guys” that need their help to go after deep pockets. They said “No”. Twice. Here: http://iptrolltracker2.wordpre… and here: http://iptrolltracker2.wordpre…NPR also asked Intellectual Ventures to talk about who they’re “helping”. Again, crickets.The shell game they play is ridiculous. I’m not sure it’s worth even trying to get to the bottom of it, we have to stop them another way. I say that way is collaboration at the pre-suit level. If we can figure out who they go after wrt demand letters, then those on the receiving end can band together. It’s one thing to take three or four folks to court when they don’t respond to the shake-down notice. It’s quite another to have to fight *everyone* in court. If all the demand letters are posted (plug for http://www.thatpatenttool.com) then everyone who’s gotten one can refuse to deal. Hard to fight a battle on a thousand fronts, right?That’s my field of dreams, baby!Just sayin’,IPTT

          1. Of course litigation records are open, so if they sue one alleged infringer then everyone that receives a letter should be able to figure that out.

            1. “Of course litigation records are open, so if they sue one alleged infringer then everyone that receives a letter should be able to figure that out.”Except that despite litigation records being “open,” both parties file almost everything under seal. link to patentlyo.com

        2. Which way to Salem?From the guy that continues to deny that the patent system is under attack from both the Left and the Right, Malcolm, your posts simply lack persuasiveness.

    2. Medimmune changed the norm to “sue first, talk later.” Ex post Medimmune, patent owners felt the need to sue in order to avoid being DJed.That really only applies to (1) patent owners who are asserting junk that stands a good chance of being tanked in a DJ action and (2) patent owners who’s licensing terms are unrealistic.Patent owners who have a decent patent and who are willing to discuss reasonable licensing terms (as opposed to trolls trying to “monetize” their collection of junk) really don’t have that much to be afraid of. Licensing a patent can be beneficial for both parties. Of course, it helps if one of the parties is an actual innovative entity and not some collection of bottom-feeding attorneys who are incapable of identifying an invalid/ineligible patent unless it’s being asserted against them.

      1. Sorry, but I disagree with your premise. First, you fail to account for the transaction costs. Transaction costs, when fully considered, can be substantial for both sides even without litigation. Second, you seem to assume that a prospective licensee is “willing,” but with patent licenses that is rarely the case. A patent license is a covenant not to sue, and it’s the rare prospective licensees that wants to pay someone else for the privilege of doing what they were already doing. Not getting sued doesn’t seem like a good value. The system is out of balance, but it’s always been imbalanced.

    3. So which is it, Steve? The authors of the article say that there isn’t any real increase in NPE litigation. Your comment suggests that there is, thanks to Medimmune.

        1. So the authors of the article above go to great lengths to discredit the President’s statement about an “explosion” of PAE litigation (while admitting that the actual statement was true), demonstrating that the number of defendants hasn’t changed much since 2010. Meanwhile, you are saying that there was an explosion – it just took place before 2010. Now I see – thanks!

          1. The President’s statement was inaccurate – and inaccurate for important reasons that should be (and are being) highlighted.I note the usual little circle of anti-patentists Malcolm, Leopold, 6, and IANAE kicking up dust and trying so very hard NOT to see why the witch hunt under way should be exposed as a with hunt.Feeding those that developed the pejorative by such dust-kicking and enabling their attack on the patent system is as offensive as if you are doing the attack personally.

            1. “The President’s statement was inaccurate – and inaccurate for important reasons that should be (and are being) highlighted.”Huh. You guys really need to get together and coordinate your arguments. From the article above:”First, in terms of raw number of patent lawsuits, our study reveals that the number of lawsuits did increase between 2010 and 2012, with a substantial increase in the raw number filed by non-operating companies (by which we mean the sum of all categories except operating companies). Our first finding therefore is similar to the President’s report.”And, by the way, I’d prefer to be called an anti-BAD-patentist. I’m definitely pro-patent. Indeed, judging by how much time you devote to your “quality blogging” hobby, I’d bet a sizeable chunk of change that I’ve procured MANY more patents for my clients over the last 4 or 5 years than you have.

              1. More dust-kicking from Leopold, as no such coordination is needed.The statement is more than just fact, Leopold.The statement contains the message, from which perception flows.You keep on trying oh so hard to NOT understand. You need to go beyond the parsed sentence you provided immediately above and realize what the contrast means.As to “time devoted” you mistake quantity of posts with amount of time to render those posts. Let me share a hint with you: when you practice intellectual honesty, the ability to make quality posts does not take a lot of time. When you focus on content (on a blog) and let little things like spelling go, you do not take a lot of time. You would lose that bet.Maybe you should make that bet with Malcolm? He has both more posts and lower quality posts.

                1. “Maybe you should make that bet with Malcolm? He has both more posts and lower quality posts.”Over the last 4 or 5 years? Yeah, right.

                2. LOL – and we can also use a few other metrics.For example: word count. There is no doubt that Malcolm far exceeds me, given his more than thirty thousand word meltdown after the Myriad case.Or, more to the point, a tally of any of the poor blogging characteristics.No one is close to Malcolm on those metrics. I do not even register on those metrics.Maybe if you stopped fixating on the red cape of ‘anon said’….

  2. ‘the President’s report was incomplete and led to an erroneous conclusion’It is true. Obama doesn’t understand the bills he signs, or intentionally misleads.Just because they call it “reform” doesn’t mean it is.”patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…“This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained, despite other democrats praising the overhaul. “This is a big corporation patent giveaway that tramples on the right of small inventors.”Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America. They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs.The patent bill (vers 1, 2, 3, etc) is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Congress passed it and Obama signed it. Who are they working for??link to usatoday.com…Patent reform is a fraud on America. Congress and Obama are both to blame. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. This bill will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Meanwhile, the large multinationals ship more and more jobs overseas. This bill is a wholesale destroyer of US jobs. Those wishing to help fight this bill should contact us as below.Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.Please see link to truereform.piausa.org… for a different/opposing view on patent reform.link to facebook.comlink to piausa.wordpress.com link to washingtonexaminer.comlink to hoover.org

  3. Thank you for this work. Finally some rational examination of the real nature of patent litigation. Hopefully the folks at GAO, the FTC and the folks in Congressman Goodlatte’s office will read this report.It has been extremely tiresome to have the policy discourse dominated by so-so analysis of economic of patent litigation impact based on a proprietary database and bad econometrics. (But lots of great trips to conferences to present the scary findings.)Perhaps your next empirical analysis will be to survey startups, young companies, and other in the entrepreneurial class to ask them about their efforts with respect to patents, IP due diligence and freedom to operate work prior to releasing the designing, developing and offering products for sale. It would shed some light on whether the alphabet soup of patent monetizations organizations are ruining innovation or if these firms are simply hoping patents will go away and choose to wing it.

    1. Let’s start with me. I belong to the “entrepeneurial class”. I did zero IP due diligence before I started my business. And yes my business relies heavily on a computer (surprise!).So what?whether the alphabet soup of patent monetizations organizations are ruining innovation or if these firms are simply hoping patents will go away and choose to wing it.That’s a ridiculously false dichotomy.

      1. You proudly proclaim that you did zero IP due diligence before you started your business?and you know that your business relies heavily on a computer (whatever that means)?.Then you have the gall to ask “So what?”So what you reveal says more about your animosity to certain types of patent eligible material than you realize.

        1. You proudly proclaim that you did zero IP due diligence before you started your business?Nothing “proud” or “not proud” about it. Just a fact. Also true of 99.9% of “entrepeneurs” for whom a computer is an essential part of their business.Again: so what?Oh wait: perhaps like many “patent apologists”, you want everyone to roll over and accept your awesome new world where paying patent attorneys to evaluate the “patent landscape” is just “a part of doing business” for everyone who wants to do business.Well, guess what? I’ve spoken with many many many “entrepeneurs” about that and they are pretty much universally revolted by the proposal. And before you are compelled to “go there”, none of those people are anti-American leftist “copiers” who abhor private property and capitalism.

          1. You profess to be involved in the patent world and insist on doing zero due diligence and you boast about it…The fact that you even ask “so what?” after professing such profound ignorance is staggering.Congrats – you have outdone 6.

          2. I agree with some of this MM. The problem is there is the other side where you have computer based companies that are innovating and believe they deserve to be able to protect their innovations from copies. And, the patents do promote innovation. And, I have seen the dark ages when no one disclosed anything. That was terrible for innovation.But, I agree that something is wrong. There are plenty of patent attorneys that do shakedown their clients. There are plenty of people going around suing and threatening suits with patents of dubious value. There are plenty of aggregaters that are bullies and outgun the little guy. But, aren’t the aggregaters part of bigger problem of corporations being able to be big and have individuals not personally libel for their behavior?Anyway, I don’t think the system should be burned down. I have seen small companies destroyed by patents, but I think frankly it was the patent attorney’s fault and the small company being suckers.I think education of small businesses is one way to fix this. I think that evening up the cost of filing a lawsuit would help enormously. The cost of discovery and invalidity contentions is enormous. I think improving patent quality would help. It is outrageous that the PTO is in Alexandria instead of a low living cost location. It makes it almost impossible for examiners to make a living wage. But, I think it is a lot like other things in our society like education. We shouldn’t burn it down but realize that it is a great system that has been neglected and now has some problems. But, I think you have finally revealed who you are. I understand the frustration. Too bad, though, that you cannot engage in a fair discussion in how to fix the system and instead have decided that reality and ethics mean nothing. Pretty much what Lemley has done.

          3. Whether 6MM is boasting or not on whether he did an FTO before he started his business is irrelevant. What is important is to remember that all actions have consequences.6MM calculated his risk/reward proposition and found that the risk of not completing an FTO was acceptable to him. Now, that calculated risk may result in a good bet. What I have a problem with, however, is if that bet gets called, and 6MM cries foul. As you make your bed, so you must lie on it.

  4. in terms of raw number of patent lawsuits, our study reveals that the number of lawsuits did increase between 2010 and 2012, with a substantial increase in the raw number filed by non-operating companies (by which we mean the sum of all categories except operating companies). Our first finding therefore is similar to thePresident’s report.Congratulations! when we evaluated the number of litigants, rather than just the number of cases, the picture changed substantially.Sure, the picture “changes” when you divide by some number. Did it change for the better? Doesn’t seem like it. It’s still a fact that PAEs filed a lot more lawsuits in 2012 relative to 2010, and it’s still a fact that PAE lawsuits represent a greater percentage of the patent lawsuits filed relative to 2010. That’s a trend. It bothers people who aren’t invested in continuing the welfare program for money-grubbing bottom-feeding patent litigators.There are other serious questions relating to PAEs that demand an empirical answer. For instance: What is the volume of patent demand letters? How many of those assert frivolous claims?If by “claim” you mean “patent claims”, then the answer is certainly going to be between 50 and 100%, and more likely between 75 and 100%.Of the litigated cases, how many of the PAE (and non-PAE) cases are frivolous?In fact, that’s not a “serious question” at all. That question is not meaningful given the broken state of the patent system that give the PAEs a reason to exist in the first place.

  5. “Using this approach, we found almost no difference between 2010 and 2012 in the number of litigants in patent cases. In other words, the “explosion” of PAE litigation between 2010 and 2012 is simply a mirage.”In other words, in 2010 there was already a ridiculous number of litigants, especially defendants, in PAE cases.

    1. In other words, the “explosion” of PAE litigation between 2010 and 2012 is simply a mirageThat’s pretty funny. How about looking at PAE litigation brought between 1980 and 2012?

      1. 1980 and 2012?That happens to correlate with the greatest age of innovation that mankind has ever seen (according to Qualcomm).Maybe these troll things are good for innovation…?

  6. In other words you empirically verified that what concerns the prezzy and the congress is so and you insist that you’ve found a clever way to mask that! k, I don’t think they care. And your assertion about a mirage isn’t making the facts change at all.

    1. your assertion about a mirage isn’t making the facts change at allThe point of the article was that there was no “explosion” in PAE-initiated litigation from 2010 to 2012 — contrary to misinformation being disseminated.There is no problem having a debate over patent litigation in general or PAEs in particular. However, any informed debate requires that the debating parties are not working with different sets of facts.Also, it is very telling when one party misrepresents the facts in order to make a point.a certain type of patent litigant—the non-practicing entity (“NPE”), also known as a patent assertion entity (“PAE”), patent monetization entity (“PME”), or simply patent troll—is the target of much public debate, if not venomThe debate may be “public,” but it is at a level that the vast majority of the public doesn’t understand and the consequences have little impact on the public.

      1. Sorry I can’t copy and paste for my reply because disqus plus certain antivirus is always crashing. I know what the point of the article is and I agree with you. My point is the the authorities aren’t so concerned about any explosion so much as they are the solid facts. Facts which have just been confirmed by this guy’s research. And I agree we all want to be looking at the same facts. Also, it may well be very telling when one side misrepresents the facts, why do you suppose the instant article is doing so and what do you think that tells us about the party who wrote the instant article? I’m not convinced that the effects have little impact on the public. According to some, many billions of dollars in the public’s stock values simply disappear into mist as a result of many of these lawsuits.

        1. What about the article is misrepresenting the facts? They addressed a “factual” statement made in the Executive Summary of the President’s report. BTW … something in the Executive Summary is typically considered important.According to some, many billions of dollars in the public’s stock values simply disappear into mist as a result of many of these lawsuitsIt would be nice if companies didn’t have to pay for salary or rent or electricity or business supplies or software licenses either, and I’m sure their impact is much more than “many billions of dollars.” The public has much more interesting/impactful things to worry about than under what circumstances large companies will have to pay for the technology they use.

          1. My favorite “executive summary” of all time was the title of a memo given to George W. Bush: “bin Laden Determined to Strike in United States”. Remember that one?”On the night of Aug. 9, 2001, speaking from his vacation ranch in Crawford, Texas, President Bush delivered his first prime-time address to the nation. It was just three days after he had read the startling President’s Daily Brief titled, ‘Bin Laden Determined to Strike in U.S.,’ which warned of airline hijackings planned by al-Qaida. It was one month after the administration’s counterterrorism chief, Richard Clarke, informed senior law enforcement officials he had gathered inside the White House’s Situation Room, ‘Something really spectacular is going to happen here, and it’s going to happen soon.’ And it was three months after intelligence analysts had begun tracking unprecedented ‘chatter’ about a possible terrorist attack. So now, Bush looked into the camera and spoke solemnly: ‘Good evening. I appreciate you giving me a few minutes of your time tonight so I can discuss with you a complex and difficult issue, an issue that is one of the most profound of our time.’ “That issue was stem cell research”Promote the progress! LOL.

          2. Trying to raise the spectre of an “explosion” and dismiss it as a “mirage” for starters. Then going on to selectively group up the data so that apparently they mask the overall trend. Frankly they’ve done it so completely I can’t even tell h t f they did it. But kuddos to them if they did, I’ll take them at their word. And I’m not sure if I agree with your characterization of what the public has to worry about. Sure, lions and tigers are more immediate concerns if one is present, but in everyday life I think it’s perfectly reasonable to be concerned about how your stock is doing. As to rent etc. yes I’m sure they do affect the bottom line quite a bit, and the stock price to boot. But those are built in and aren’t just a sudden drop out of nowhere and for what is pretty much no good reason. The patent system could be arranged differently to prevent that sort of thing. But noooo, we’ve just got to be saddled with the old school “surprise” litigation model.

            1. Frankly they’ve done it so completely I can’t even tell h t f they did it.It took me about 20 seconds to understand it. If you knew anything about litigation and understood how AIA artificially impacted the number of “suits,” then it is quite easy to figure it out. The patent system could be arranged differently to prevent that sort of thing.Here is your soap box. Start explaining how it should be done differently.

              1. “and understood how AIA artificially impacted the number of “suits,” then it is quite easy to figure it out.”Yeah I thought that’s what it was. Why did he even bother with the study if that is all that he is talking about? He could have made it more clear that this is how he is masking it though he did bring it up and I was thinking that was probably it. I just didn’t see it in his presentation of his numbers. “Here is your soap box. Start explaining how it should be done differently.”Well je sus for a quick fix you can simply make it such that if, according to historical empirical data there is a high likelihood of a huge stock drop that dwarfs the actual cost of the suit as a result of the suit being filed then a settlement is mandated at some minimum amount or an amount to be determined by the court. That should catch the most egregious examples. There are other options of course.

                1. Why did he even bother with the study if that is all that he is talking about?Why? Because the statement in the report that “[s]uits brought by PAEs have tripled in just the last two years, rising from 29 percent of all infringement suits to 62 percent of all infringement suits.” is misleading. The statement gives the wrong impression.if, according to historical empirical data there is a high likelihood of a huge stock drop that dwarfs the actual cost of the suit as a result of the suit being filed then a settlement is mandated at some minimum amount or an amount to be determined by the courtA huge stock drop that dwarfs the actual cost of the suit? That is an investor problem (or opportunity) — not a patent problem.Settlement is mandated at some minimum amount or an amount to be determined by the court? Isn’t that what most litigations end up being? The parties use the court as a means to agree upon a settlement amount.

                2. Maybe 6 (and others) need to recognize that patents are enforced through the court system.That is the system the government set up.A litigation suit – in and of itself – is not a ‘bad’ thing.

                3. Maybe 6 (and others) need to recognize that patents are enforced through the court systemThis is spot on.However, maybe 6 has a point (God … that stuck in my throat). It would be nice to have another mechanism, besides litigation, that can be used to enforce patents — particularly for low dollar amount infringement. Right now, because of the high cost of litigation, enforcing a patent becomes the sport of kings with the attorneys taking a large chunk of the money. That being said, for high value cases, both sides are going to want to “lawyer up” to maximize their chance of winning.I could imagine some type of specialized arbitration that both parties agreed to be bound to that will be empowered to address the big three issues: validity, infringement, and value of infringement.

                4. As long as the patent holder’s full right of exclusivity is maintained as a baseline, I would be open to exploring options.Although, the notion of sliding in (even the remote possibility) compulsory licensing sickens me.

                5. I could see something like this for situations in which the patent owner wants the infringer to take a license and the stakes are not that high.

                6. Sure, when the patent holder makes that decision (and not a court) – no problem.But the decision needs to be the patent holder’s and not a nanny state.

                7. If the only damages being asked for are monetary (and not an injunction), then I think being “forced” into a specialized court wouldn’t necessarily be a bad idea. This already occurs with Federal Courts where certain cases involving less than $75K are forced down to the state courts.To me, the goal is to provide a mechanism by which infringement for lesser amounts can be resolved at a much lower cost. If somebody is only asking for $30K, why should both sides fight a battle that will cost $1M each?As part of this “solution,” you could also have the defense of “invalidity” off the table, because if a defendant wanted to challenge the invalidity they could always go the reexamination route with the USPTO. This leaves infringement and value of infringement as to the two big issues to resolve.

                8. Not a bad idea, although the case involvement level and negotiation amounts are not necessarily equivalent – for a (perfectly valid and legal) reason. Be careful that you do not overstep into the protected negotiation arena.

        2. “My point is the the authorities aren’t so concerned about any explosion so much as they are the solid facts….According to some, many billions of dollars in the public’s stock values simply disappear”The anti-patent Besson ‘study’ showing that disappearance has been debunked.If you want solid facts, you need to understand that the heard that you are charging up the hill with are a bunch of lemmings.

      2. it is very telling when one party misrepresents the facts in order to make a point.You don’t say. the vast majority of the public doesn’t understand and the consequences have little impact on the public.ROTFLMAO

    1. Sounds like rational thought rather than paid for rhetoric.Why can’t you just say “I agree”, like regular people do?

      1. There is nothing “regular” about wanting to expose the myth that enforcing patent rights is “the worst thing ever.”In fact, it is downright irregular to remain silent as the heat of political rhetoric scorches any semblance of reason in the political arena.

        1. the heat of political rhetoric scorches any semblance of reason in the political arenaYou’re trying to tell us that you’re concerned about the “heat of political rhetoric”? Seriously? That’s pretty funny.

  7. Did you integrate the GAO report (or the five part series of articles at IPWatchdog by Steve Moore – of Tafas fame)?

    1. Steve Moore – of Tafas fameDid he change his name officially to “Steve Moore – of Tafas fame”? You seem to think so.

      1. Did you want to make a point (of anything) Malcolm? How can I help you advance the conversation in regards to Mr. Moore’s pedigree, or is my noting that someone has a worthy accomplishment for some reason especially irritating to you?

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