Patent Damages Awarded in 2019 as a percent of U.S. GDP, 0.0090%, is less than half of 2012

While bigtech revenue and share prices are soaring amidst the COVID-19 pandemic, and the market value of the top players dwarfs other companies, payouts in patent damages have shrunk from highs in 2012.

Lower damages do not appear to be the result of more or better innovation on the part of the leading incumbents. It is, agues scholars like Adam Mossoff, Professor at the Antonin Scalia School of Law at George Mason University, the result of corrosive legislation, aggressive lobbying and misguided courts, which have equipped some businesses to infringe others’ inventions with relative impunity.

With three million U.S. patents in force, lower patent litigation costs, the question should be not why are there so many patent suits, but  why is there not considerably more amidst the growing refusal to license?

“The patent troll narrative in the patent policy discussions in D.C. has worked well for Big Tech for more than a decade,” writes Mossoff in IP Watchdog. “The patent system has been substantially weakened over the past 15 years with a slew of court decisions, regulatory actions, and legislation that have mostly restricted or eliminated many patent rights. By itself, the Alice-Mayo inquiry has wrought legal uncertainty and unprecedented invalidations of patents or rejections of patent applications. The data confirms a loss of the longstanding competitive advantage of the gold-standard U.S. patent system in promoting innovation relative to Europe and China.”

More patents; fewer suits

With so many patents in force – and many of them better examined and more carefully vetted and with more companies refusing to take a license – how is that patent litigation has decreased dramatically over past decade?

Corrosive legislation, aggressive lobbying and misguided courts have equipped some businesses to infringe inventions with relative impunity

“Big Tech’s goal is more strategic,” continues Mossoff, a Senior Fellow at the Hudson Institute and member of the board of directors of the Center for Intellectual Property Understanding (CIPU). “A weakened patent system makes it possible for these companies to engage in what lawyers and policy wonks call ‘efficient infringement.’ Everyone else calls it piracy. Invention theft has become more common because it’s now an easier and cheaper method for large, well-capitalized companies to simply take someone else’s technology than to invest the time, money, and resources in creating it themselves.

“Piercing the veil of Big Tech’s self-serving policy rhetoric, the data confirms that they are not suffering from widespread ‘abusive litigation’ by ‘patent trolls.’ Big Tech companies are not now—nor were they ever—the victims of a massive wave of patent lawsuits, either before or after the Alice-Mayo inquiry was created by the Supreme Court. This is a policy canard.

“In fact, the litigation trend for HTIA (High Tech Inventors Alliance) member companies is downward. Since 2010, HTIA companies have experienced approximately a one-half to one-quarter drop in lawsuits filed against them (with a significant number of the recent lawsuits filed by a single company).”

For the full IP Watchdog article, go here.

Image source: IPWatchdog.com via AIPLA 

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