Changes in median patent awards over 14 years to trolls and to active companies

Non-practicing entities (NPEs), which hold patents but make no products, have profited from suing practicing entities. Trolls versus companies, you can think of it. The Economist, Aug. 20, 2011 at 58, has a chart (from which I eyeballed the metrics that follow) based on PricewaterhouseCoopers data that shows median damages awarded NPEs and practicing entities during two time periods. During 1995-2001 trolls’ median was $5 million; the companies’ median was $6 million. During 2002-2009, trolls doubled to $13 million while companies dropped to $4 million.

One could speculate on all kinds of reasons for this dramatic shift in outcomes. Trolls might have gained experience and figured out which lawsuits to bring and how hard to contest them in court. Perhaps settlements dropped as more companies stood up to trolls, taking some bigger hits at trial. Maybe companies with infringement claims against each other went all the way to trial less as they resorted more to license agreements or other resolutions. My final observation is that I have seen figures widely disseminated about patent cases brought to trial costing $2 million and up just in legal fees. If so, and if the median recover after trial was about $4 million, that expensive crap shoot would not be favored.

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