By Sarah McBride
SAN FRANCISCO, Dec 10 (Reuters) - For the first time,
individuals and companies that do not themselves make anything -
commonly known as "patent trolls" - are bringing the majority of
U.S. patent lawsuits, according to a study by a California law
professor.
The sharp increase in this type of lawsuit serves as a
milestone likely to exacerbate the tension over patent issues
and increase calls for patent reform and scrutiny of the system.
This year, about 61 percent of all patent lawsuits filed
through Dec. 1 were brought by patent-assertion entities, or
individuals and companies that work aggressively and
opportunistically to assert patents as a business model rather
than build their own technology, according to a paper by Colleen
Chien, a law professor at Santa Clara University.
That compares with 45 percent in 2011 and 23 percent five
years ago.
"It's pretty dramatic," Chien told Reuters via email.
"It means more suits are being brought by entities that don't
make anything than those that do."
Chien also spoke on the matter on Monday at a patent
workshop held by the U.S. Federal Trade Commission and the
Department of Justice.
Increasingly, the lawsuits are hitting startups.
About 35 percent of startups that have raised $50 million to
$100 million have been sued on a patent, Chien said, as have 20
percent of the companies that have raised $20 million to $50
million.
Many patent demands are settled before reaching the lawsuit
stage. Estimates on the ratio of demands to lawsuits run between
100:1 to 307:1, Chien said.
Many in Silicon Valley deride patent-assertion entities as
"patent trolls." The unflattering nickname arose because of
their habit of suddenly demanding licensing fees from
unsuspecting businesses, much like mythical trolls that lie in
wait under bridges to extract tolls from travelers.
But even if others perceive them as trolls, many patent
litigants who do not make products or develop technology think
of themselves in a better light. Many of them represent
inventors, sometimes university researchers, who often cannot
afford to defend patents on their own.
Many technology companies are eager for reforms that would
make it harder to assert patents. Some would like to see the
cost of asserting patents rise, for example. Many patent holders
sue based on contingency, meaning they pay only if they win an
award.
But technology companies also frequently sue each other over
patents. One of the higher-profile cases involves Apple Inc's
fight with Samsung Electronics Co Ltd.
In August, a U.S. jury found the Korean company had copied
critical features of the hugely popular iPhone and iPad and
awarded the U.S. company $1.05 billion in damages.
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