Have you ever heard of a PAE? No? Well it stands for Patent Assertion Entity, Still not sure what they do? You might recognize them if we call them patent trolls. PAEs are companies that own the rights to patents through contracts with inventors or that buy them from others with the sole intent to file law suits against anyone that might be infringing on any patent they currently own. It is a big business and one that costs the market millions of dollars each year.
Chinese Huawei made a deal with the patent consortium Rockstar to avoid a lawsuit for unauthorized use of patents. This is the first of eight device manufacturers with Android which has decided he does not want to be involved in a lawsuit.
What’s this??? A US Senator, John Cornyn (R-TX), is working to introduce a patent reform law that will help to limit the number of suits created by Patent Trolls. Called the “Patent Abuse Reduction Act of 2013” the bill looks to be a step in the right direction at least when considering Patent Holding companies. The problem is that this bill does little to stop or slow down filing obvious, vague, or patents covered by prior art which many of these suits stem from.
We have often written that the continuous stream of patent lawsuits and injunctions that are pushed around the globe are costly, dangerous and anti-consumer, but now someone has actually gone out and done the math to find out just how much damage they do per year. The study performed by James E. Bessen and Michael E Meurer both from the Boston University School of Law states that in 2011 more than $29 Billion (with a B) in direct costs were incurred all because of what are called Non-Practicing Entities (most call them patent trolls). This $29 Billion also came during a down economy and affected small to medium sized businesses the most.