Study: Patent Trolls’ Use of Business Method Patents on the Rise

The Internet infrastructure industry is frustratingly aware of the damaging affect patent assertion entities (PAEs) or “patent trolls” have on the economy. The baseless lawsuits filed by these patent trolls cost companies $29 billion in direct payouts in 2011.

While our industry is a main target for patent trolls, the burdensome litigation impacts business as a whole and reform is essential to permanently fix the problem. A new study [PDF] by Patent Freedom further highlights the need for legislative reform.

According to the study, which examined nearly 2,000 infringement lawsuits, patent trolls’ use of business method patents is on the rise. The study found that in 2004, 168 companies were targeted by patent trolls using business method patents. Fast-forward to 2013 and that number has already reached 1,567.

In addition, the types of industry that are targeted by the litigation is not exclusively hi-tech, which accounts for 42 percent of businesses dealing with lawsuits. Retail comprises 17 percent of the industry, followed by financial services at 13 percent and automotive/ transport and consumer products rounding out the top five at eight and five percent respectively.

Abuse of the current patent system is clear and a legislative solution must be a top priority for Congress. Learn more about what the i2Coalition is doing to fight patent trolls and how you can help by visiting our Public Policy page.