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If they lost, that patent has probably been invalidated. At the very least, its applicability has been downplayed.



A patent troll loses either when its patent is invalidated in the course of litigation or when its patent is upheld but the court determines that the alleged infringement did not occur.

About 40% of patents are invalidated in the course of infringement suits. When a patent is upheld, about half the time the court finds that the alleged infringement did not occur. [1] So there would be a valid patent to seize in about 30% of cases in which a patent troll loses its suit.

It's a start. I don't think losers' penalties would fundamentally change the financial calculus for patent trolls, however, because 97% of patent suits are settled before they go to trial. [2] Doubtless a similarly large share of threatened suits are resolved before a suit is even filed. What needs to change is the calculus for the troll's target of paying up versus challenging the patent in court.

Here's a crazy idea. Perhaps patent-holders should be required to register licensing income, as well as infringement complaints, with the patent office. A patent's validity would automatically be assessed by a court if the licensed value or the number of complaints passed some threshold. Since so many patents are invalidated, this would encourage patent-holders to seek royalties or threaten litigation in fewer circumstances.

Alternatively, a similar system could be used as the basis for enabling class actions to challenge a patent's validity. Merely publicizing a patent troll's actions would help its targets organize to share litigation expenses. Wouldn't it be a wonderful thing if we began to see television ads asks, "Have you been threatened with a lawsuit and strong-armed into paying licensing fees on a patent covering ..."

1. Michael Heller, Gridlock Economy, 2010.

2. http://www.freakonomics.com/2011/07/11/how-patent-trolling-t...

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