The Direct Costs from NPE Disputes
Boston University School of Law Working Paper 12-34
(June 25, 2012)
James E. Bessen
Boston University School of Law
Michael J. Meurer
Boston University School of Law
Abstract
In the past, “non-practicing entities” (NPEs), popularly known as “patent trolls,” have helped small inventors profit from their inventions. Is this true today or, given the unprecedented levels of NPE litigation, do NPEs reduce innovation incentives? Using a survey of defendants and a database of litigation, this paper estimates the direct costs to defendants arising from NPE patent assertions. We estimate that firms accrued $29 billion of direct costs in 2011. Moreover, although large firms accrued over half of direct costs, most of the defendants were small or medium-sized firms, indicating that NPEs are not just a problem for large firms.
Keywords: patent, litigation, litigation cost, non-practicing entities, software patents
JEL Classifications: O31, O34, K41
Size: 368 KB
James E. Bessen Contact Information
Director
Research on Innovation
202 High Head Road
Harpswell, ME 04079
Phone: (617) 531-2092
Email: jbessen@researchoninnovation.org
Lecturer in Law
Boston University School of Law
765 Commonwealth Avenue
Boston, MA 02215
Email: jbessen@bu.edu
Michael J. Meurer Contact Information
Boston University School of Law
765 Commonwealth Avenue
Boston, MA 02215
Phone: (617) 353-6292
Fax: (617) 353-3077
Email: meurer@bu.edu
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