The Mind-Blowing Cost of Patent Trolling

The Citizen's Guide to the Future
Sept. 20 2011 2:34 PM

The Mind-Blowing Cost of Patent Trolling

Patent trolling—buying up vague or broad patents and then suing any business that inadvertently violates its intellectual property—is the scourge of tech firms. As was reported on an excellent recent episode of This American Life, no one will wants to call himself a patent troll. Instead, those companies that are plaintiffs in such suits claim to be protecting the property rights of innovators.

Now, a paper called “The Private and Social Costs of Patent Trolls” attempts to tally up the squandered funds—and see where they ended up. Ars Technica says, “[P]atent trolls (‘non-practicing entity’ is the clinical term) have cost publicly traded defendants $500 billion since 1990.” In just the last four years, the average cost is $84 billion—“more than a quarter of US industrial research and development spending during those years.” That includes lost profits as well as costs to defendants. James E. Bessen and Michael J. Meurer of Boston University’s law school—who wrote the 2008 book Patent Failure—joined Jennifer Laurissa Ford for the paper. The trio arrived at the figures by looking at the stock market performance of publicly traded companies sued for patent infringement.


Importantly, the authors write that very little of this money ends up in the pockets of scrappy geniuses who were cheated out of profits generated by their patents. “We conclude that the loss of billions of dollars of wealth associated with these lawsuits harms society. While the lawsuits increase incentives to acquire vague, over-reaching patents, they decrease incentives for real innovation overall.”

Read more on Ars Technica.

Future Tense is a partnership of SlateNew America, and Arizona State University.

Torie Bosch is the editor of Future Tense, a project of Slate, the New America Foundation, and Arizona State that looks at the implications of new technologies. 


War Stories

The Right Target

Why Obama’s airstrikes against ISIS may be more effective than people expect.

The One National Holiday Republicans Hope You Forget

It’s Legal for Obama to Bomb Syria Because He Says It Is

I Stand With Emma Watson on Women’s Rights

Even though I know I’m going to get flak for it.

Should You Recline Your Seat? Two Economists Weigh In.


It Is Very, Very Stupid to Compare Hope Solo to Ray Rice

Or, why it is very, very stupid to compare Hope Solo to Ray Rice.

Building a Better Workplace

In Defense of HR

Startups and small businesses shouldn’t skip over a human resources department.

Why Is This Mother in Prison for Helping Her Daughter Get an Abortion?

Politico Wonders Why Gabby Giffords Is So “Ruthless” on Gun Control

Sept. 23 2014 4:45 PM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
Sept. 23 2014 6:40 PM Coalition of the Presentable Don’t believe the official version. Meet America’s real allies in the fight against ISIS.
Sept. 23 2014 2:08 PM Home Depot’s Former Lead Security Engineer Had a Legacy of Sabotage
Sept. 23 2014 1:57 PM Would a Second Sarkozy Presidency End Marriage Equality in France?
  Double X
The XX Factor
Sept. 23 2014 2:32 PM Politico Asks: Why Is Gabby Giffords So “Ruthless” on Gun Control?
  Slate Plus
Political Gabfest
Sept. 23 2014 3:04 PM Chicago Gabfest How to get your tickets before anyone else.
Brow Beat
Sept. 23 2014 8:38 PM “No One in This World” Is One of Kutiman’s Best, Most Impressive Songs
Future Tense
Sept. 23 2014 5:36 PM This Climate Change Poem Moved World Leaders to Tears Today
  Health & Science
Sept. 23 2014 4:33 PM Who Deserves Those 4 Inches of Airplane Seat Space? An investigation into the economics of reclining.
Sports Nut
Sept. 23 2014 7:27 PM You’re Fired, Roger Goodell If the commissioner gets the ax, the NFL would still need a better justice system. What would that look like?