Thanks to trolls like IPNav, the Times explains, U.S. companies are forced to spend upwards of $30 billion every year on patent litigation. Most of that money goes to troll profits and legal expenses, with less than 25 percent flowing to inventors. Even Spangenberg concedes that his business uses “the courts as a marketplace, and the courts are horribly inefficient and horribly expensive as a market.” Patent trolls like IPNav are a symptom of a fundamentally broken system.
There is debate about the definition of patent trolls, but the term broadly refers to people who sue companies for infringement, often using patents of dubious value or questionable relevance, and then hold on like a terrier until they get license fees. In recent years, patent trolls — they prefer “patent assertion entities,” or P.A.E.’s — have gone from low-profile corporate migraine to mainstream scourge. This is partly because the number of patent infringement suits has more than doubled in recent years, to 4,731 cases in 2012 from 2,304 in 2009, according to that RPX report. The cost to businesses, which pass along the expense to consumers, is immense. One study found that United States companies — most of them small or medium-sized — spent $29 billion in 2011 on patent assertion cases.