The evidence points definitively

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Patent trolls bank that in some cases companies will settle rather than pay the time and monetary costs of fighting infringement lawsuits. In others cases patent trolls seek sympathetic judges who will rule in their favor. Patent trolls are exploiting inefficiencies in the legal system regarding how we define and enforce intellectual property rights. Add to those inefficiencies the fact that patents are not like other kinds of property where ownership is clear cut.

Unlike tangible property like a farm where I can say I legally own this land and you are planting on it the intellectual property space is relatively amorphous. It can be hard to tell whether you are infringing on my intellectual property or not. Congress has found it hard to act on the patent troll issue. To date twelve pieces of legislation have been proposed to clamp Chinese Overseas America Number Data down on NPEs but none have passed—in part because no one knows how many NPE lawsuits are genuine and how many represent trolling. To understand the behavior and impact of non practicing entities Cohen Gurun and Kominers used a database of NPEs and of their subsidiaries. The researchers found some court cases in which NPEs sued for patent infringement. In of those cases the defendants were publicly traded—so the researchers were able to determine whether the lawsuits looked legitimate or more like mere money grabs. troll ward. The biggest predictor of whether you will be sued is whether you have a lot of cash or just came into an increase of cash says Cohen.





It looks overwhelmingly like NPEs are just targeting firms that are more likely to pay out. In fact the researchers found that for every billion or so in cash holdings a company was six times more likely to be sued by an NPE. Furthermore they found that NPEs tend to go after firms that have small legal teams or those engaged in other non IP related litigation—perhaps hoping for easy settlements. If NPEs really thought they had a great case as stewards of intellectual property it wouldn t matter how many lawyers a target company had argues Cohen.