PublishedMarch 12, 2015

If You Claim That Patent Assertion Entities Are Beneficial, Prove It

I want to follow up on Tuesday’s post. In that post, I quoted from a letter sent by over 50 law professors and economics scholars that said, essentially, that there’s simply no doubt that current levels of patent litigation, and patent assertion entity litigation in particular, are harming innovation.

Earlier this week, a different group of professors sent a much different letter, claiming that,

much of the information surrounding the patent policy discussion, and in particular the discussion of so-called “patent trolls,” is either inaccurate or does not support the conclusions for which it is cited.

The letter goes on to claim that there is, essentially, a conspiracy to promote empirical studies justifying patent reform:

The claim that patent trolls bring the majority of patent lawsuits is profoundly incorrect. Recent studies further indicate that new patent infringement filings were down in 2014, with a significant decline in non-practicing entity (NPE) case filings. Unfortunately, these facts have gone largely unnoticed. Instead, unreliable studies with highly exaggerated claims regarding patent trolls have stolen the spotlight after being heavily promoted by well-organized proponents of sweeping patent legislation.

I wonder why such studies have “stolen the spotlight”? I suspect it’s because there isn’t a single empirical study that shows any benefit to patent troll litigation. One study after another shows harm from the current levels of PAE litigation. Even if the studies aren’t perfect, the fact that they all point in the same direction should tell us something.

The professors do call out one particular study, by Jim Bessen and Mike Meurer, that found that the direct costs of NPE litigation in 2011 were $29 billion, the bulk of which (about 70%) was legal fees and expenses. The letter says that the Bessen and Meurer study was “roundly criticized.”

It is true that Dave Schwartz and Jay Kesan wrote an article criticizing the study. (Bessen and Meurer added a thorough response to the critique in the published version of their paper.) But nearly all the criticism of Bessen and Meurer that you’ll find is based on the Schwartz and Kesan article. In other words, there’s one critique that’s cited over and over, and the study becomes “roundly criticized.” Neat trick.

One other note from the letter: the professors attach a list of papers which supposedly support their position. A good number of the articles, however, say nothing about whether patent assertion entities are harmful or beneficial and don’t critique any empirical studies.

It’s easy to sit back and try to poke holes in someone else’s work. It’s a lot harder to provide evidence. As I mentioned in my previous post, it’s not as if opponents of reform are hurting for money — they’ve produced a theatrically-released movie and put posters up all over the DC Metro.

It’s time for those who claim that there’s no need for reform to put their massive amounts of money where their mouths are. If PAEs are so good for innovation, then prove it.

Matt Levy

Previously, Matt was patent counsel at the Computer & Communications Industry Association

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