A new report from the National Institute of Justice says that a large number of patent lawsuits in the United States have been ruined by the high cost of litigation, and that the damage has been exacerbated by the fact that many of the lawsuits are filed by corporations with no apparent reason other than to profit from patent litigation.
The report, which was released Wednesday by the institute, finds that nearly a third of the cases that the institute studied have been settled by companies with little or no money lost in the case.
The National Institute on Drug Abuse (NIDA) says that it will conduct an ongoing review of the problem, and is encouraging companies to seek out information from their peers about what is happening to their patents.
“Many of the companies that we examined have been very careful about not engaging in litigation, not engaging with other companies to get their ideas to market, and so they’ve been able to get very little,” said Sarah Kuehl, the institute’s lead researcher and lead author of the study.
“And so there’s been a lot of these very expensive lawsuits that have really damaged the lives and livelihoods of many people, and this report shows that’s a lot more than just the lawsuits that are filed in the US.”
The report comes as patent litigation costs have skyrocketed in recent years.
In 2017, the average patent lawsuit cost $6.7 million in fees and legal fees, according to the Federal Trade Commission.
That was up from $4.7 in 2016.
The cost of the most expensive lawsuits increased to $14.3 million in 2018, a record high for the year.
Kuehl says that the report’s findings suggest that patent litigation is a major drag on the economy.
“The average patent case is a lot like a lottery ticket,” she said.
“You have a lot people who are interested in doing a lot and lots of money at stake.
And so if you can’t have people with money to spend on patent litigation, you have a bad system.”
Kuehler says that many people don’t realize that the cost of a patent case can be a serious burden for a company, and could result in a company losing millions of dollars in revenue.
“They think that because they’re going to win, that they’re not going to lose money, but the reality is that the losses can be so high that it’s hard to justify not filing a lawsuit, even if it means losing millions in revenue,” she added.
In a statement, the patent licensing industry said that it would work to make sure that it has a viable business model and that it pays its employees and its customers fairly.
“While we understand that the number of people who file lawsuits is a significant number, we also understand that a fair system of justice can make it difficult for companies to compete in a marketplace where the costs of doing business are so high,” said Michael Molloy, executive vice president of the National Intellectual Property Alliance, in a statement.
“As an industry, we need to ensure that we have an effective patent licensing program that is fair, efficient and effective.
We are working to find solutions that allow us to compete and grow, while also addressing patent misuse and protecting our users’ rights.”
Kueshl’s study has found that patent lawsuits are the biggest cause of patent disputes, but it is important to note that they are not the only problem.
“There’s a long list of other issues we could be looking at that are just as important and just as damaging to innovation,” Kuehler said.
The patent litigation industry is the largest in the country.
Its total annual revenue reached $5.8 trillion in 2018.