From Felix Salmon at Reuters:
Here’s an idea: take the resources that the SEC is currently using to
prosecute insider trading, and give them instead to the FTC, so that
they can be used to aggressively prosecute patent trolls instead. The
cost would be the same (by definition), and the benefit would surely be
much greater, as today’s wonderful report from the White House underscores.
Patent trolls are known by various names — one is “non-practicing
entities”, or NPEs. Another term is “Patent Assertion Entities”, or
PAEs. But whatever they’re called, the most important research into the
costs of trolls is this paper from researchers at Boston University:
We find that NPE lawsuits are associated with half a
trillion dollars of lost wealth to defendants from 1990 through 2010.
During the last four years the lost wealth has averaged over $80 billion
per year.
And we’re not talking about a steady loss of $80 billion per year,
either. If the PAEs were costing $80 billion per year from 2007-2010,
they’re probably making three or four times as much today, given how
quickly their business is growing. Here’s a chart showing PAE activity,
in red, versus all other patent cases, in blue:
The patent trolls are harming the nation in all manner of unquantifiable ways as well. This American Life just aired a fantastic episode
on the subject of patent trolls, which features a man called Nick
Desaulniers who wanted to build a low-cost heart monitor. But he was
quickly dissuaded: after doing a patent search, he came away “horrified
at how generic some of the patents were”, and persuaded that there was
no way he could possibly build a business. “However many jobs I could
have created or however many lives I could have saved,” he concluded,
“that’s it.”...MORE
