Of Trolls, Davids, Goliaths, and Kings: Narratives and Evidence in the Litigation of High-Tech Patents

Intellectual Property and Patents

Article Snapshot

Author(s)

Colleen Chien

Source

North Carolina Law Review, Vol. 87, pp. 1571-1615, 2009

Summary

This article analyzes data on what kinds of patent cases are filed and litigated and how it compares to public opinion.

Policy Relevance

While media attention and public involvement often focus on independent inventors and “patent trolls,” 42 percent of patent claims are filed by large companies. Accordingly, in order to create effective reform, policy makers should focus on these areas of high traffic litigation.

Main Points

  • Patent infringement lawsuits are most often filed by an owner of intellectual property (IP) rights alleging unpermitted use of that property. As technology continues to develop, the number of patents has continued to rise, and, with it, the amount of costly litigation. Several steps at reform have been attempted, but in order to properly target these reforms, it is necessary to understand who is filing the majority of these cases.
     
  • Most of the parties that participate in patent litigation fall into one of several stereotypical categories:

     

    • Davids (as in David vs. Goliath) are independent inventors who have developed and attained IP rights and are now attempting to defend these rights against large companies.
       
    • Goliaths are large companies suing independent inventors from whom they have either acquired IP rights or who are infringing on the companies’ already existing set of technology patents.
       
    • Patent Trolls, also known as non-practicing entities (NPEs), are corporate entities that collect IP rights but do not use or build the technology protected by their IP.
       
    • Small companies are also often involved in litigation both as plaintiffs and defendants.
       
  • These four groups of litigants file suit against one another in predictable ways: Davids sue Goliaths, small companies file suit and defend against both large companies and each other, and Patent Trolls sue anyone and everyone in defense of their IP portfolios.
     
  • The majority of media attention about patent litigation focuses on emotionally compelling stories. This has included David vs. Goliath stories, such as “Flash of Genius,” and has more recently turned toward focusing on “Patent Trolls” and their potential for clogging up the court system with claims about patents they do not even use.
     
  • However, it has been unclear whether the amount of media attention is proportionate to the actual number of cases filed by these entities, specifically Patent Trolls. Using data from the Stanford Intellectual Property Clearinghouse, including all high-tech patent litigation cases filed in district Court from January 2000 through March 2008, it was possible to categorize parties to patent litigation actions into these categories and determine what percentage of suits each participated in.
     
  • The results of this analysis determined that David vs. Goliath cases were a distinct minority of patent cases filed, highly disproportionate to the amount of media attention given to independent inventors. Moreover, Patent Trolls only initiated approximately 17 percent of suits during this time period, less than expected based on media attention, while public and large private companies initiated 42 percent of patent litigation cases.
     
  • These results indicate that despite the public fervor in favor of independent inventors and against Patent Trolls, reform designed to unclog patent courts should focus on limiting suits by corporations. This analysis should also serve as a basis for future studies which should include analysis of the vast majority of patents that are never litigated.
     

 

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