Non-practicing entities, or patent trolls, cost American software and hardware companies more than $29 billion in 2011, according to a report from the Boston University School of Law.
Non practicing entities are patent-holding firms or individuals who own patents, but do not use the technology to produce goods. Rather, the patent-holders use their intellectual property to profit when companies use their patented technology.
Spending on patent litigation has risen nearly 436 percent since 2005, and the increase prompted Electronic Times Internet Co. to report “domestic smartphone industry is in a state of emergency due to global ‘patent trolls’ launching a series of attacks.”
“Unlike rival manufacturers such as Apple and Nokia, there is no way to reach cross-license agreements with patent trolls through counter-suits,” continues the report.
The Boston University School of Law suggests solving the problem by providing “greater transparency in the patent system” and by making sure patent damage awards “are proportional to the value of the patented technology.”
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