Bessen puts the cost of dealing with “patent trolls” at half a trillion dollars in the last two decades. Yet patent trolls account for only one in six patent suits, by his estimate, so the patent system’s burden on the economy is much higher.
Just as we worry about old Soviet nuclear weapons falling into the wrong hands, Chien says that the patent hoards accumulated by corporations as “defensive” measures are starting to end up with “non-practicing entities” who use them for lawsuits.
For example, memory chip-maker Micron Technology Inc. in 2009 sold 4,500 patents to a patent lawyer in 2009. Chien points out that the patents are worth more to “non-practicing entities,” because they can sue without fear of retaliatory patent suits.
During the Cold War, there were arms limitation talks. Similarly, many of the big technology corporations want the patent bombs taken away, or at least limited. Google’s lawyers are critical of the patent system, and it’s clear the company would rather not have to strike deals like the one to buy Motorola. Cisco Systems Inc., the world’s largest maker of networking gear, wants patent infringement damages to be based on the value of the component in question rather than the entire product.
Tech companies can expect little help from Washington. After a decade of wrangling, Congress is set to approve a patent reform bill when the Senate reunites in December. It will be the largest legislative change to the patent system since 1952. Even so, experts say its effect on the high-tech industry will be marginal. It had sought more sweeping changes, but resistance from the pharmaceutical industry, which is much better served by the current system, has kept out the more radical proposals.
The legislation will make it marginally harder to get and hold onto patents, Chien said, but that’s unlikely to cut down on the number of spurious patents, she believes.
And paradoxically, the bills could expand the glut of patents that’s plaguing the industry, since one of its goals is to reduce the three-year backlog of patents pending at the Patent Office.
“It’s going to take a long time for Congress to tackle patents again, and that’s really a problem because this troll problem is going to continue to fester,” Samuels said. “We all feel the effects.”