Patent Law

More Wisdom (with Statistics!) from the IP Maximizer Blog

By Les Weinstein, Michael Young, John Leo Wagner, Eric van Ginkel, and Victoria Pynchon

(right, my own best legal advice - if the litigation won't likely net you $5 million, take your legal fees to Vegas - you'll have a lot more fun losing them there)

If you're not reading Jackie Hutter's IP Asset Maximizer Blog you're way behind the curve.  In fact, the curve isn't even on your horizon.  Without Jackie, the IP world is flat.  Check out this excerpt from Jackie's recent post on the "Starry Eyed" View of Patent Litigation Being a Great Way to Monetize Patent Value. 

I recently became aware of this patent litigation analysis prepared by PriceWaterhouseCoopers ('PWC') (hat tip: Marcus Malek of the Intangitopia blog). The report appears to be rigorously prepared from data obtained from a large number of reported patent litigation cases dating from 1995. I read this report with interest and think that anyone who is interested in the ROI of patent enforcement should read it also. The data provide a wealth of information for anyone even thinking about bringing a patent case or who is involved in defending against claims of patent infringement.

Although the data in the PWC provides informational value, I nonetheless have a big problem with the following assertion that is prominently presented on page 18 under the title 'What This Means for Your Business':

"In light of the findings in this study, patent litigation appears to continue to be an effective protection and monetization path for patent holders." (emphasis added)

This unqualified statement gets a big 'WHAT?!' from me.

The PWC data indicates that patent holders prevail only 37 % of the time, with the breakdown of wins being 19 % at summary judgment and 57 % at trial. (page 8) The median damage award for patent holders is $3.8MM, measured over 7 years from 2001 to 2007 (page 2). Notably, the median damage award varies substantially among technology areas, with some areas such as pharmaceuticals, consumer goods and automotive resulting in damage awards significantly lower than the median value. (p 3) The values are further skewed because the award figures include the $1.5 B award against Microsoft that was later markedly reduced (but was current as of the time of the PWC report).

While the $3.8MM figure might initially seem somewhat impressive to many patent owners, notably missing from PWC's assertion that patent litigation is an 'effective [] monetization path' is the cost to the patent holder to obtain that median damage award of $3.8 MM. At best, this assertion presents a "starry eyed" view of how patent owners can extract value from their patent assets. At worst, the assertion is misleading. (But, in any event, it is not necessarily surprising because PWC derives significant revenue from patent litigation.)

There's more!  Read the rest of Jackie's incisive post here.

Full post as published by IP ADR Blog on May 05, 2009 (boomark / email).