Wednesday, August 28, 2013

Apple is the Top Target of Patent Trolls

Apple is the top target of patent trolls with 171 patent lawsuits filed against the company by non-practicing entities since 2009, according to PatentFreedom via Fortune. Rounding out the top five targets are HP, Samsung, AT&T, and Dell.

As of August 2013, PatentFreedom has identified and profiled over 710 distinct NPEs (a number which continues to increase). Since 1985, these NPEs have been involved in litigation with over 10,000 different operating companies in nearly 11,000 actions, for a total of over 30,000 events. There are clear indications that NPEs in recent years increasingly seek to enforce their patents against companies of all sizes and in many industries. Despite this trend, as the table below shows, NPEs continue to target many large and high-profile companies quite relentlessly.

Michael Brody, an intellectual property specialist at Winston & Strawn, reveals some interesting statistics about the scope of these patent lawsuits, via TechHive.

● About 125,000 software patents are filed annually. "And that kind of meat has attracted sharks," writes Hachman.
● In 2012, more than 4,200 separate companies or individuals were sued by NPEs.
● The average licensing cost for a case that goes to trial is $7.5 million
● The average licensing cost for an out-of-court settlement is $29.75 million.
● The cost to defend each suit ranges from $800,000 per suit for startups to an average cost of $7.9 million for the those firms with over $50 billion of annual revenue.
● In total, the annual cost or "troll tax" for defending NPE suits is $1.04 million annually for firms with annual revenue under $1 billion, and up to $57.67 million for those with revenues over $50 billion
● All told, an NPE has a 24.1% chance of "winning," either by negotiating a settlement, winning at court or winning at appeal.
● The "net discounted value" of an NPE suit is $800,000; i.e., it's likely that the suit itself will net at least that much just by being filed.

Check out the chart below for the full list of most targeted companies.

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