Patent trolling has reportedly cost US companies $500 billion to date

Several months back there was a huge issue with Lodsys who attempted to sue iOS, Android and even Blackberry developers for allegedly infringing upon its patents. Many had referred to Lodsys as a patent troll, which has been defined as a company with no tangible products of its own apart from a broad patent portfolio, and who are suing companies with money in order to gain a settlement under the possible threat of a product ban. Now if you’ve ever wondered what the cost of patent trolling is, three Boston University researchers might have the answer for you.

The researchers, James Bessen, Mike Meurer, and Jennifer Ford have managed to compile the costs of patent trolling. This amount has been totaled up since 1990, and it seems that they have managed to come up with a staggering cost of $500 billion for US companies. In fact according to their calculations, in the past four years, the average cost of patent trolling has risen to $83 billion annually. Ouch.

Take note that it seems that how these researchers arrived upon that figure is based on tangible costs, such as legal fees and settlement payouts. They did not factor in things such as employee distraction (which could lead to lower productivity levels), legal uncertainties and the time and effort needed to do product redesigns. The figure was also based on publicly held companies and not smaller, private companies who might have had to shut down and go out of business as they could not afford a costly legal battle. It appears that if all those factors were taken into account, we’re guessing that the figure would have been a lot more.

Tyler Lee
Categories: General
Tags: lawsuit, research