Patent Law Practice Center

Patent Trolls Cost Society $500 Billion Dollars, But What Does it Mean to You?

R. David Donoghue, Partner at Holland & Knight and Practice Center Contributor, passed along this post he wrote for his Retail Patent Litigation blog that discusses the outrageous cost of patent troll litigation and what it means for retailers.

Three Boston University professors – James Bessen, Jennifer Ford and Michael Meurer — are writing a provocative law review article using empirical data to quantify the cost of patent trolls. The cost of patent trolls is clear to every retailer that I speak with, but the results of the article are still shocking:

[Patent trolls] are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010.

Id. At 2.   $500,000,000,000 in lost wealth over twenty years, but it is actually worse than it sounds.  The losses are growing; an average of $80 Billion was lost per year over the last four years.  Almost two-thirds of the $500 Billion were lost in the last four years.  Some will no doubt argue that the study overstates the problem, but the authors make a compelling case that it is a levelheaded assessment of the cost of patent troll litigation.  They focus the study upon the impact of troll litigation upon a public company’s share price and find that, controlling for market fluctuations and other anomalies, stock prices take a significant and lasting hit when a troll suit is filed against a company. (more…)