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New report examines the economic cost of patent trolls

Study from the Progressive Policy Institute explains why there has been such an upsurge in patent litigation

Call them Patent Assertion Entities (PAE) or Non-practicing Entities (NPE). Or, if you will, call them “Patent Trolls.” But now matter how you label them, there are certainly organizations that are trying to game the system and turn a nice profit from patent litigation. But why has there been such an upswing in these types of suits in recent years? And what is the true economic cost of all of this? These are the types of questions that the folks at the Progressive Policy Institute (PPI) hoped to answer.

On a conference call, the report’s author, Phil Goldberg of Shook Hardy & Bacon LLP, spoke about “litigation prospecting.” He stated that current patent laws make this process easy. “Patents are so vague, so it’s hard to tell if something is infringing. If someone claims infringement, the only way to resolve it is through litigating.” He cited figures, stating that it costs, on average, $1.6 million to get through discovery and $2.8 million if the case goes to trial. Those costs are high and borne by the defendants. 

Senior Editor and Community Manager

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Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....

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