Patent trolls increasingly reliant on “business method” suits says survey

PatentFreedom reports 41 percent of all patent troll suits from 2011-2012 attacked companies’ business methods

The popular view of the “patent troll” is a litigious company that sits on a small property, just hoping some larger tech company implements their “patented” technology so the troll can sue for infringement. For years, that’s how trolls have functioned and, in some cases, thrived.

But according to a recent report by PatentFreedom, an analytics company that identifies and classifies patents, trolls have begun to target a new line of litigation: “business method” lawsuits.

The report says 41 percent of all patent troll suits in 2011-2012 dealt with the way a company operates its business. PatentFreedom claims that the 954 different patent troll suits targeted “the practice, administration, or management of an enterprise, the processing of financial data, or the determination of the charge for goods and services.” This could be anything from the company’s method of online payment to the search function on the company’s website.

This 41 percent figure is a new high mark, rising 14 percent from just six years ago (2005-2006). In 2009-2010, 38 percent of patent troll suits dealt with companies’ business methods.

Surprisingly, despite the reputation of trolls attacking technology companies, only 42 percent of all business method suits were against tech businesses. Retailers in particular have seen business method suits become much more common, with the proportion of business method suits out of all patent troll lawsuits rising from 27 percent in 2005-2006 to 51 percent in 2011-2012.

The PatentFreedom survey also reports that patent trolls are starting to think smaller as well. 43 percent of all business method suits are against companies who took in less than $100 million in revenue last year. That is up 10 percent from 2005-2006.

Check out the results of the PatentFreedom survey here (PDF).

 

For more on the evil patent trolls, check out these InsideCounsel stories:

New ad campaign looks to shine the spotlight on patent trolls

Apple the most targeted technology company by patent trolls

Do patents spur innovation?

Minnesota AG takes a stand against patent trolls

Facts & Figures: Companies now facing more litigation

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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