Dueling Data: Patent Dispute Stats Don’t Add Up

U.S. Government Accountability Office and some IP information sources differ on whether there is a patent troll problem.

In a comprehensive study examining forces impacting the patent system mandated the American Invents Act, the United States Government Accountability Office (GAO) has found that only about 20% of patent suits are brought by NPEs or so-called patent trolls. The majority of patent litigation, the report stated, are filed by companies that sell products.

This information is in stark contrast to what lawmakers and the public have been led to believe. Data reported this year by RPX and cited by Professor Colleen Chien of Santa Clara University School of Law, and other others in academic papers, says that in 2012 NPE suits were 62% of those filed. Rational Patent Exchange (NASDAQ: RPXC) is a publicly held patent aggregator that buys patents on behalf of its members, mainly large technology companies, to avoid being named in patent infringement suits.

seal_2011_12_20Stated the government study: “GAO’s detailed analysis of a representative sample of 500 lawsuits from 2007 to 2011 shows that the number of overall defendants in patent infringement lawsuits increased by about 129 percent over this period. These data also show that companies that make products brought most of the lawsuits and that non-practicing entities (NPE) brought about a fifth of all lawsuits.

Pace and Meaning

It’s not difficult to tell that some companies are interested in painting a more negative picture of patent litigation and plaintiffs than really exists.

NPE activity is up over the past few years for multiple reasons, and the licenses that result from them are not necessarily bad for innovation or commerce. The pace and meaning of innovation is accelerating rapidly. With new and complex ideas having greater meaning to businesses than ever, disputes over inventions are inevitable. So is misinformation.

Bad actors that file patents that should never have issued in the first place, and who routinely infringe others’ inventions, are no better than businesses that launch nuisance suits. Unfortunately, there are a lot more of the former than the latter.

Information sources that fail to provide all of the information or to explain it in context compound the problem.

Illustration source: gao.gov; aplusclick.com

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