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====Critiques====
Share price analysis only works for privately publicly traded companies.
RPX Corporation's business model of litigation protection services may benefit from an increased number of NPE lawsuits, especially those that they claim were defended effectively due to RPX Corporation help. A conflict of interest exists for RPX between providing accurate database information and inflating numbers to generate more revenue for the business.
===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"**"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 do produce goods and services"*"the estimated direct, accrued costs of NPE patent assertions totaled $29 billion in 2011"*"much of this burden falls on small and medium-sized companies"*"publicly traded NPEs likely cost small and medium-sized firms more money than these NPEs transfer to inventors"*"the distribution of costs imposed by NPEs is highly skewed, probably because NPEs pursue a range of different business strategies"*"In 2011, 2150 unique companies were forced to mount 5842 defenses in lawsuits initiated 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 [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 settlementNPE 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====
*"We estimate that firms accrued $29 billion of direct costs Patent lawsuits spiked in 2011after passage of [[Leahy Smith America Invents Act]]. Moreover**GAO partially attributes this spike to the provision that no more than one defendant may be listed in a lawsuit, although large firms accrued over half unless they are related through business partnership (e.g. person who is infringing and corporation of direct costsinfringer). So, if a PAE wished to sue three persons, most they would have to file three separate suits. This new provision would increase the number of the lawsuits.**"AIA restricts this practice by prohibiting joining unrelated defendants were small or medium-sized firms, indicating into a single lawsuit based solely on allegations that NPEs are not just a problem for large firmsthey have infringed the same patent."[http://www.gao.gov/assets/660/657103.pdf] **"Direct costs include the cost According to our analysis of legal services, license feesdata for this period, operating companies and other costs incurred in response to NPE litigation riskrelated entities brought an estimated 68 percent of all lawsuits."(Lex Machina)*"The median company PMEs and likely PMEs brought 19 percent of the lawsuits." (Lex Machina) *Operating companies sued had $10.8 million in annual revenues. 8251% of the defendants had less than $100 million in revenue and these accounted for 50% of the defenses. Small and medium-sized companies account for 37PAEs sued 42% of the accrued direct costsdefendants."(RPX)
====Data Sources====
*"We present answers Lex Machina for patent lawsuits from 2007 to these questions based on 2011.**Lex Machina selected a unique survey sample of defendant companies 500 lawsuits (100 lawsuits per year) to determine margin of error was 5% for combined years of 2007-2011 and a comprehensive database of NPE litigation10% for any particular year. The survey, which covers 82 firms who mounted 1,184 defenses against NPE litigation, is unique in three ways."**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 filedData from RPX - Deemed sufficiently reliable for the purposes of the GAO report**provides aggregated information about NPE patent license fees
====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]]
