I work a lot with SMEs and startups on tight patent budgets. The key to getting maximum protection at minimal cost is abandonment. Delay your costs as much as possible until the market is proven for your product. If the market fails, abandon the patent. Don't put another dime into it.
When I studied abandonment rates in different industries a few years ago, I discovered that Finance and Pharma were very good at it. If the product didn't work out, they dumped the patent and moved on, even after a notice of allowance. The electrical engineering arts were much more reluctant to abandon. I'm not sure why, but that does lead to excessive costs. Here is what the data looked like.
With new businesses and more opportunities for everyone, I don't know why experts are surprised by the increase in the value of a patent or the potential cost of litigation. Frankly, this should be expected. Many of the products on the market (some of them) are either a new idea or an idea someone steal from another party with simple modification. Once again, laws are not keeping up with technology.
Dr. Quine: Good points on how inventors may benefit from the trolls. It kind of reminds me of personal injury lawyers -- there are great ones who do a good job for their clients, and there are ambulance chasers who give other lawyers a bad name. With patent trolls, we tend to hear more about the quick-money artists, than the the ones who may be helping otherwise powerless inventors.
I don't recall hearing a lot about stories in which patent trolls helped to defend an inventor's patent. Has the media been remiss in reporting on this? Can anyone cite a few good examples of those cases?
I see a doubled edged sword. The "patent trolls" benefit the small inventors by escalating the stakes for infringement and providing a marketplace for their intellectual property. On the flip side, "patent trolls" may force small companies to pay unjustified royalties because they cannot afford to litigate. The "patent exchanges" benefit the large corporations that can afford to buy into the consortium which the small companies cannot easily access. If the potential abuses of patent trolls are to be addressed, it seems only fair to address the potential abuses of the "monopoly" patent exchanges at the same time.
Frank, That surprises me. I can understand why the trolls wouldn't want to sue the giant companies that have in-house legal staff to shoo-away nuisance lawsuits, but why go after the small fish, who have little money for lawyers or to pay off patent trolls. As the CEO of a small startup doing some extraordinary things, I simply couldn't afford $350 an hour for attorneys to fight, but neither could we afford to pay even thousands of dollars to buy off a troll. I think legislative changes are needed to block such nuisance suits and to protect innovation at startups.