The Truth Behind Patent Trolls

Patent Trolls are an innovation bogeymen, with numerous research articles and legislation addressing ways to curb troll activity. Patent Trolls, also known as Patent Assertion Entities (PAEs), generate revenue through suing or threatening to sue businesses that infringe on patents. Experts dispute terms for such corporations, labeling them as either Patent Assertion Entities (PAEs) or Non-Practicing Entities (NPEs).

Hypothesis 1: Most Patent Assertion Entities are drivers of innovation, and incorrectly labeled as patent trolls.

Method 1: Find list of PAEs, sort by location, number of lawsuits filed, damages. Need to control for size of company and sector.

Top 10 PAEs in 2015, according to (Unified)

Patent Assertion Entities Filings, 2015

Company Name	Total Lawsuits Filed¹	Lawsuits Filed in Eastern District of Texas¹
eDekka LLC	101	101
Data Carriers LLC	85	85
Shipping and Transit LLC	69	0²
Cryptopeak Solutions LLC	66	66
Hawk Technology Systems LLC	61	3
Rothschild Connected Devices Innovations LLC	60	59
Wetro Lan LLC	56	55
Loramax LLC	50	50
Genaville LLC	50	50
Oberalis LLC	50	50

¹ Data aggregated via LexMachina

² 79% of cases filed in Southern District of Florida

648 total cases, 519 in E.D. Tex. 80.09% of all patent litigation cases filed in 2015 were filed in E.D. Texas.

A patent infringement case can be filed in any of the US districts that have personal jurisdiction over the defendant, which include states or districts where the defendant's products are sold, regardless of whether or not an office exists in that location. (1) The large number of cases filed in E.D. Texas could point to the favorable disposition of the court patent holders. See Eastern District of Texas.

Hypothesis 2: Patent litigation is increasing, but only because of the uncertain nature of technological developments and how patent claims apply to that. Patent litigation surges are consistent with major shifts in technological developments

• High tech is the only sector where a majority of cases were NPE related

Method: Find a reliable graph of developments within the technology sector and match it to the one below [1]:

We will be hard pressed to find a graph that can map technological development over the last 5 years reliably. Other measures of technological development we can use and compare to patent litigation trends: total patent grants, venture capital investment amount, R&D spending in the high tech sector...

Hypothesis 3: Data that supports increased costs to innovation rely on broad and confusing definitions for NPEs and PAEs

Interesting facts that may deserve extra research

• Historically, the Eastern District of Texas is the top patent dispute venue. In 2015, 44% of all patent litigation was filed in E.D. Texas, most of which were assigned to Judge Rodney Gilstrap