===Bessen, Meurer: The Direct Costs From NPE Disputes(2012)=== [http://cornelllawreview.org/files/2014/01/99CLR387.pdf Cornell Law Review]
====Findings====
*definition of non-practicing entities**"parties who own and sometimes assert patents but do not practice the technology covered by their patents"**"We estimate individuals and firms who own patents but do not directly use their patented technology to produce goods or services, instead asserting their patents against companies that firms do produce goods and services"*"the estimated direct, accrued costs of NPE patent assertions totaled $29 billion of direct costs in 2011. Moreover, although large firms accrued over half of direct costs, most "*"much of the defendants were this burden falls on small or and medium-sized firms, indicating that NPEs are not just a problem for large firms.companies"**"Direct costs include the publicly traded NPEs likely cost of legal services, license fees, small and other costs incurred in response medium-sized firms more money than these NPEs transfer to NPE litigation riskinventors"*"The median company sued had $10.8 million in annual revenues. 82% of the defendants had less than $100 million in revenue and these accounted for 50% distribution of the defenses. Small and medium-sized companies account for 37% costs imposed by NPEs is highly skewed, probably because NPEs pursue a range of the accrued direct costs.different business strategies"*"[W]e concluded [in the In 2011 paper] that much of the cost borne by technology , 2150 unique companies as they defend against NPE were forced to mount 5842 defenses in lawsuits is a social loss and not a mere transferinitiated by NPEs"(based on RPX database)
[[Image:BessenMeurer2014.jpg | 500px]]
====Data Sources====
*"We present answers to these questions based on a unique survey of defendant companies and a comprehensive database of NPE litigation. The survey, which covers 82 firms who mounted 1,184 defenses against NPE litigation, is unique in three ways[developed by RPX]."*Survey*includes defendant companies that are privately held, including small firms**reveals costs associated with cases in which NPE patents are asserted but which are resolved before a lawsuit is filed**provides aggregated information about NPE patent license fees
*"Between February and April 2012, RPX invited about 250 companies to participate in a survey of their NPE-related costs. The pool of invitees included RPX clients and nonclient companies with whom RPX has relationships."
**used RPX NPE Lawsuit Database's definition of NPE: patent assertion entities, individual inventors, universities, and non-competing entities
**82 out of 250 provided data on lawsuits and of these, 46 also provided data on non-litigation patent assertions and related costs
*Of 1,184 defenses, 784 (66%) resolved by adjudication or settlement
NPE Lawsuit Database
*based on cases coded "830 Patent" in the PACER database (maintained by Administrative Office of the U.S. Courts
*uses broad definition of NPE (e.g. includes universities), criticized for overstating costs
**counterarguments: only about of 1% of NPE lawsuits come from universities; universities still create social costs when they litigate patents
====Critiques====
Survey utilizes a small sample size that was not randomly selected and that is mostly composed of large companies that are more likely to be public and to be sued.
Average costs are generally much larger for large companies than for small and medium-sized companies.
Conflict of interest mentioned above in Bessen, Ford, Meurer's 2011 paper.
====Other Findings====
"[S]maller companies pay more in direct NPE-litigation costs relative to their size."'
"About a third of the cost to defendants involves patent assertions that do not go to court"
===Government Accountability Office: Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality===
This study was mandated by Section 34 of the [[Leahy Smith America Invents Act]]. The purpose of the study was to determine the consequences and effects of NPEs on patent litigation.[http://www.gao.gov/assets/660/657103.pdf]
====Findings====
*Patent lawsuits spiked in 2011 after passage of [[Leahy Smith America Invents Act]].
**GAO partially attributes this spike to the provision that no more than one defendant may be listed in a lawsuit, unless they are related through business partnership (e.g. person who is infringing and corporation of infringer). So, if a PAE wished to sue three persons, they would have to file three separate suits. This new provision would increase the number of lawsuits.
**"AIA restricts this practice by prohibiting joining unrelated defendants into a single lawsuit based solely on allegations that they have infringed the same patent."[http://www.gao.gov/assets/660/657103.pdf]
*"According to our analysis of data for this period, operating companies and related entities brought an estimated 68 percent of all lawsuits." (Lex Machina)
*"PMEs and likely PMEs brought 19 percent of the lawsuits." (Lex Machina)
*Operating companies sued 51% of defendants. PAEs sued 42% of defendants. (RPX)
====Data Sources====
*Lex Machina for patent lawsuits from 2007 to 2011.
**Lex Machina selected a sample of 500 lawsuits (100 lawsuits per year) to determine margin of error was 5% for combined years of 2007-2011 and 10% for any particular year.
*Data from RPX - Deemed sufficiently reliable for the purposes of the GAO report
====Critiques====
*"A limitation of [Lex Machina] categorization is that litigants were not contacted to verify their identity, so there is some uncertainty about the accuracy of the category in which Lex Machina placed them."
====Other Findings====
Criteria for defining a PAE versus an operating company.
*Defendants per suit ratio (how many defendants are listed on one lawsuit)
**From 2007-2011: "There were about 1.9 defendants on average for suits filed by operating companies, and about 4.1 defendants on average for suits filed by [PAE]s." (Lex Machina)
Reasons why ED Texas is a popular venue:
*"Eastern District of Texas, the Eastern District of Virginia, and the District of Delaware were among the top districts for quicker trials, higher success rates, and higher damage awards for patent owners." PricewaterhouseCoopers, 2012 Patent Litigation Study: Litigation continues to rise amid growing awareness of patent value. [www.pwc.com/us/en/forensicservices/publications/2012-patent-litigation-study.jhtml]
[[Category:Patent]]