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…)

Fighting Fire With Fire: Strategies for Controlling Patent Troll Defense Costs

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 patent troll litigation phenomenon and offers four ways to defend against patent trolls more effectively and more cost efficiently.

Patent troll litigation has received some excellent media exposure this summer.  First, Chicago’s Ira Glass and his This American Life team put together a phenomenal hour-long program dissecting the patent troll phenomenon – if you have not listened yet make the time, it is very well done.  More recently, Santa Clara University Professor Colleen Chien wrote an article for Forbes discussing ideas for “turning the tables” on patent trolls.  Chien calls trolls “modern-day robber barons” and troll investors “suckers.”  Chien then points out that traditional patent trolls have found ways to overcome the traditional barriers to suit – legal fees and countersuits.  It is generally difficult to file substantive counterclaims against trolls and trolls routinely use contingent fees to avoid up-front costs, while suing multiple entities to increase the size of recovery.  Chien then suggests some strategies for defending against trolls and removing the defense-side barriers:  a) alternative fees; b) shared defensive efforts; and c) creating non-profit trolls.

At a basic level, Chien makes good points, but she does not offer concrete proposals to advance your troll defense efforts.  Here are four ways to defend against patent trolls more effectively and more cost efficiently: (more…)

Is Post-Grant Patent Review Coming to the Retail Industry?

R. David Donoghue, Partner at Holland & Knight and Practice Center Contributor, recently launched the Retail Patent Litigation blog.  In describing the blog, Donoghue writes, “Though patent litigation is relatively new to many retailers, it is a significant and growing concern for all retailers, as well as the members of the retail supply chain.  Retail Patent Litigation is a guide to help retailers understand patent litigation and how to effectively and creatively drive their individual cases to positive resolution.”  In this article, he discusses how patent reform may impact the retail industry.

As patent reform looks increasingly likely, the retail industry is beginning to look at how patent reform will impact the retail supply chain. Earlier this week, the National Retail Foundation (“NRF”)wrote to Congress supporting Section 18 of H.R. 1249 which creates a post-grant, adversary proceeding for challenging the validity of patents at the Patent Office. The NRF advocates for Section 18 as a cost-effective alternative to costly patent litigation. While post-grant review (like inter partes reexams) would likely be cheaper than district court patent litigation, Section 18 has significant draw backs. (more…)