A rise of patent infringement suits from NPEs is not the big problem, according to an August 2013 report from the US Government Accounting Office. The real issue is a rise in cases about software patents and a lack of clarity about what software patents mean and who owns them, it said, concluding:
Our analysis indicates that regardless of the type of litigant, lawsuits involving software-related patents accounted for about 89 percent of the increase in defendants between 2007 and 2011, and most of the suits brought by [NPEs] involved software-related patents. This suggests that the focus on the identity of the litigant -- rather than the type of patent -- may be misplaced.
The report noted the patent office started working with the software industry in November 2011 to clarify the language used in software patents. It also called for linking data on patent suits to data on examinations of related patents at the patent office.
Software patents (purple) have grown much faster than overall patents (light blue) in the 1991-2011 period, the GAO report said.
However, some press reports made other conclusions based on the GAO's findings. For instance a Bloomberg Businessweek report led with the factoid from the GAO report that "the number of lawsuits filed by so-called patent trolls increased more than fourfold from 2007 to 2011."
Spulber noted that the increase from 834 suits brought by NPEs in 2007 to 3,401 suits in 2011 was an artifact of patent reform legislation enacted in 2011. The Leahy-Smith America Invents Act (AIA) mandated companies file separate suits against each alleged infringer rather than lumping several defendants into one big case as had been the practice.
A study conducted by the University of Richmond School of Law and others supports that conclusion. "The recent [talk of a] rising tide is counting the suits incorrectly, but that's a small thing," says Spulber.
The larger issue, Spulber told us, is "the so-called troll issue is an excuse, a horror story, and a wedge issue to attack patents generally."
He points to the current patent-suit legislation working its way through in Congress as well as a pending Supreme Court case. "These proposals are meant to weaken the rights of patent owners, particularly for software and business methods, but at the end of the day they could impact the strength of all patents."
Separately, the Supreme Court is expected to hear this spring the case of Alice Corporation Pty. Ltd. v. CLS Bank International. "If the outcome is negative, it could invalidate practically all business method and software patents active today," says Spulber.
— Rick Merritt, Silicon Valley Bureau Chief, EE Times