Faculty News | Economist | 04
Patent trolls: Why no one likes them
Re: Lauren Cohen
A recent paper, by Lauren Cohen, Umit Gurun and Scott Kominers, suggests that the rise in patent-related litigation has not really helped protect the rights of inventors. The authors collected a comprehensive dataset on NPEs, relevant patents and lawsuits between NPEs for the period 2001 and 2011. The paper's authors found that rather than acting as benevolent patent enforcers, NPEs simply target the firms with the most cash—however good or bad their argument that a patent has been infringed is. For example, the probability of being sued by NPEs doubles after a firm experiences a sudden increase in its cash balance. Patent trolls are also more likely to go after firms that employ fewer lawyers. And the largest NPEs are the worst offenders.