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Most Software Patent Trolls Lose Lawsuits 108

Posted by Soulskill
from the dismissed-without-prejudice dept.
An anonymous reader writes "A new study is out concerning patent trolls and software patents, which found the rather surprising news that the most litigated patents tend to lose nearly 90% of the time. When broken down into different categories, patent trolls and software patents lose their lawsuits most often. While some may suggest this means 'the system is working,' that's not really true. The data suggests that most companies, when threatened with a lawsuit, end up settling or licensing to avoid the high costs of litigating. But the fact that so few software patents and patent trolls do well at trial may be more incentive to fight back. Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents."
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Most Software Patent Trolls Lose Lawsuits

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  • by N0Man74 (1620447) on Friday September 24, 2010 @05:44PM (#33692634)

    You can lost most of the time, but when you win, can't the winnings quite overshadow the actual effort in trolling the system?

    It's not completely unlike walking up to many random women and saying, "nice shoes, want to have sex?" Sure, the vast majority will think you are a schmuck and maybe even give you a slap, but to some having an extremely tiny percentage agree makes it worth their effort. ;-)

  • by Moryath (553296) on Friday September 24, 2010 @05:51PM (#33692716)

    No.

    The underlying problems are twofold.

    First, that a major number of patents are being granted that never should have been granted. Either because they are overworked, or because they are not correctly able to evaluate patents due to lack of training in the fields they are analyzing, or because they have been indoctrinated into a "just grant it the courts can sort it out later" (and a friend I know who works in the USPTO has been told that several times by his direct superiors over the years) mentality, the USPTO is granting things that never should have been granted.

    Second, that the US court system is so fucked up and overburdened that most people who get hit with a troll lawsuit choose to settle, because fighting it is going to take years upon years, resources upon resources, and probably it's cheaper for them to just pay up. The legal system has ceased to be a venue where fair and equitable analysis of this sort of thing can take place, and instead is just a bludgeon for bullies with money and shyster lawyers willing to throw away the ethical codes to beat up on everyone else.

  • by CarpetShark (865376) on Friday September 24, 2010 @05:52PM (#33692718)

    Yes, but if you're going to claim to know something about the law, it helps if you can pick some arbitrary criterion for why your rule works. In other words:

    "Patent claims tend to fail 90% of the time" is factually incorrect.

    But:

    "Patent claims by trolls tend to fail 90% of the time." is so fuzzy that no one can dispute it.

  • A thought (Score:4, Insightful)

    by webheaded (997188) on Friday September 24, 2010 @05:57PM (#33692774) Homepage
    If the system was working, these patents never would have made it through in the first place for them to sue anyone with. :)
  • maybe (Score:4, Insightful)

    by phantomfive (622387) on Friday September 24, 2010 @06:00PM (#33692802) Journal

    Either way, what does seem pretty obvious is that all those ridiculous patents you see in patent lawsuits are, in fact, bad patents

    Oh sure, I'll accept that they are bad patents, but I'm not going to accept that the law recognizes them as bad until Amazon's one-click patent is invalidated. Obvious ideas can be, and have been, patented, and that is a serious problem.

  • uhh (Score:5, Insightful)

    by nomadic (141991) <[nomadicworld] [at] [gmail.com]> on Friday September 24, 2010 @06:01PM (#33692810) Homepage
    The data suggests that most companies, when threatened with a lawsuit, end up settling or licensing to avoid the high costs of litigating. But the fact that so few software patents and patent trolls do well at trial may be more incentive to fight back.

    Of course we don't get a link to the paper itself, but the fact that where defendants decide their case is strong enough to go to trial, they tend to win, is not especially surprising.
  • Only 90%, huh? (Score:4, Insightful)

    by Zocalo (252965) on Friday September 24, 2010 @06:04PM (#33692818) Homepage
    OK, but what's the average return on investment for a successful patent troll lawsuit?

    Turning that 90% figure on its head, if the average ROI for buying up a patent and sucessfully suing some suitably wealthy potential infringers in court is more than nine times the outlay then unfortunately being a patent troll is still a viable business model.
  • by gront (594175) on Friday September 24, 2010 @06:04PM (#33692822)
    Sure, just assume that 90% of the lawsuits brought by patent trolls lose at final judgment. You can't work backwards from that factoid and conclude that 90% of software patents are crap. After several levels of filtering, only then is a case decided. And at each level, if the software patent i strong, the process ends. Demand letter gets reviewed. Strong patent? Settle. Initial lawsuit gets filed. Semi-strong patent? Cost-risk analyze defending the lawsuit and license if the numbers don't work. Lawsuit continues. Weak but possible bad judgment? Settle. So only the patents that the defendant looks at and decides that the risk of losing the suit, cost of the suit, _and_ the strength of the asserted patent are such that it makes sense to risk a final judgment are these 90% losses representative. Hardly a basis for a universal declaration that all software patents are weak and unenforceable. Sure, folks may have a beef with the concept of software patents, but that is a separate issue.
  • Statistics... (Score:4, Insightful)

    by Idiomatick (976696) on Friday September 24, 2010 @06:13PM (#33692902)
    90% of patent trolls defended against succeed. That does NOT mean that more people should defend themselves. Say 50% of patent claims are settled outside court, and we have the stat that 90% of patents that make it are successfully defended. What does this tell us about the success rate of the 50% that never make it to trial? Fuck all because of self selecting bias, this isn't a blind trial.

    The majority of people in marathons do fairly well. That cannot be extrapolated to say that the majority of people would do well in a marathon. Its stupid. This study is no different.

    Disclaimer: I didn't RTFA because stats scare and confuse me.
  • by Moryath (553296) on Friday September 24, 2010 @06:19PM (#33692956)

    And what REALLY sucks is that anyone who actually worked on the patent gets precisely Jack Shit.

    The CEO, CFO, and the lawyers will suck up all the money. The rest get told "here's a grand or so bonus, now get back to work, slaves."

  • by Moryath (553296) on Friday September 24, 2010 @06:23PM (#33692986)

    The number of people who settle rather than litigate - compared with people who later litigate and get the same patents thrown out - indicates that you are full of shit.

    The system isn't working, because the cost to challenge a patent is so high, and the process takes so long, that most companies just pay into the extortion racket.

  • by Eternal Vigilance (573501) on Friday September 24, 2010 @06:45PM (#33693190)
    The "law" has always been just another way for those who write the law to control those who are required to follow it.

    "Law" is simply disembodied violence, physical force transferred to the domain of the mind.

    The notion of "fair and equitable analysis" is simply the system's own inflated self-image, like "all men are created equal" in 1776, or "freedom" in 2010.

    I agree with your statements, btw. I just want to make sure that in moving to something new we don't repeat the mistakes of our past.


    There's free as in speech, free as in beer, and free as in range. Americans are "free" in the final sense.
  • by Penguinisto (415985) on Friday September 24, 2010 @06:45PM (#33693192) Journal

    Given that the 10% usually results in a uber-massive payday, and that the company being litigated against usually settles anyway?

    Not sure of the odds, but it likely adds up to a HUGE reason as to why patent troll 'companies' are realizing a lot of investment money, ne?

  • The "law" has always been just another way for those who write the law to control those who are required to follow it. "Law" is simply disembodied violence, physical force transferred to the domain of the mind.

    Intriguing rhetoric, but what alternative do you propose to Law? (And I'd call it more "passive aggressiveness" than "disembodied violence", but perhaps that's just a different face of the same coin. )

  • Expected Value (Score:4, Insightful)

    by dcollins (135727) on Friday September 24, 2010 @08:40PM (#33693922) Homepage

    The probability of success is irrelevant if the expected value (success probability * average profit) is still positive.

  • by Sarten-X (1102295) on Friday September 24, 2010 @11:32PM (#33694744) Homepage

    That sounds like a great bit of logic there, if you ignore various facts along the way.

    Many of those founders owned slaves. Does American society today support slavery?

    Women were considered unfit to enter politics. Are American women still kept out of political offices and denied the ability to vote?

    Society's observed reflection of its laws is not the result of some poorly-understood natural process, but the intentional result of the society's trust in its governing body. Laws are merely standards for behavior. When citizens follow the standards cooperatively, society as a whole benefits.

    To use the infamous car analogy, consider the laws requiring drivers to periodically stop and allow crossing traffic to move. If everyone follows the law, a few people get slowed down by a few seconds. If people are greedy and force their way into an intersection, then many people wait for several minutes, or worse if gridlock develops. By suggesting a single cooperative behavior, traffic laws improve society. Drivers who act against the laws (ideally) face rejection by society, and the simple way to accomplish that is to have society levy a fine.

    When adopting a new standard, it's important to have everyone's views included. With a single party/person controlling the standard, the chance of a mistake is very high. That's why American citizens (should) vote for representatives that they believe will support their views. Thus, their opinions are directly represented in the laws that are passed. Believe it or not, we are already creating a new society together, and have been doing so for the last two hundred years.

    Want a bigger voice out of the 300 million Americans? Write your representatives! Run for office! Do something following the democratic process, with respect for the opinions of the millions of people who aren't you. Laws will always exist in some form, because there will always be greedy people who act against the society's benefit, and the society will always find a way to reject them. "Fair and equitable" trials are simply a means of determining who's being greedy.

    Even patents are just a way to protect the hard-working inventor from the greedy people who will steal his idea and profit from it, without the investment cost to develop the idea on their own. As Moryath said, the problems lie in the implementation of the laws' enforcement, not the laws themselves, and certainly not in the concept of a lawful nation.

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