This article is part of a Chronicle. See more from this Chronicle
Michelle Miller, Janusz Ordover, Jan 29, 2015
Patent trolls are currently under intense scrutiny by lawmakers, regulators, academics, and industry players. The term “patent troll” generally refers to patent owners that do not make or sell products, and instead focus on licensing and litigation to monetize their acquired patents. These entities are also known as “patent assertion entities,” and in this paper, we use the terms interchangeably. Infringement suits brought by trolls have exploded over the last few years—in 2012 patent trolls accounted for 62 percent of all patent infringement suits, and recent studies estimate that trolls imposed direct costs of $29 billion in 2011. And these costs appear to be deterring investment in new businesses and technologies—one study estimated that venture capital funding was $8.1 billion lower over a five-year period than it would have been without PAE enforcement.
Although most commentators have concluded that many patent troll business models lead to market inefficiencies, it is not clear what can be done in the short term to address the wide variety of concerns that troll activities raise. Various legislative solutions have been suggested and attempted, but these do not address the full scope of the problem. Attempts to bring antitrust claims against trolls also largely have failed, as in the case of Intellectual Ventures I LLC v. Capital One Finan…