Thirteen cars. Six (6!) Lamborghinis. Private Jet. $20 million dollar home. Paris apartment. A Monet or two.
No, we aren’t talking about Jay-Z or Jay Leno.
We’ve just name-checked a few items from the lifestyle of Patent Troll kingpin Erich Spangenberg. Spangenberg has built his empire into the biggest troll on the block.
Abuse of the patent system harms our system of free enterprise, our courts and consumers.
According to one estimate, trolls have cost the U.S. economy half a trillion dollars in the last 20 years, with over $320 billion occurring in just the last four years.
Last year that number of patent lawsuits more than doubled to 4,371 cases. U.S. companies spent $29 billion on patent assertion cases in 2011. Of that $29 billion, only $6 billion went to investors. The vast majority, $23 billion, went straight to litigation fees.
Today, trolls account for a majority of all patent litigation in the United States, a clear illustration that this problem is only getting worse. What’s more, a majority of companies targeted by trolls are small businesses.
All of this frivolous litigation and fee extortion adds up. According to the Government Accountability Office, Trolls account for 40 percent of all patent cases, nearly doubling in the past five years, choking our crowded courts with even more junk lawsuits. Boston University economists estimate that patent trolls cost the economy more than $29 billion a year in direct costs and a whopping $83 billion in indirect costs.Trolls are hitting us right in our wallets, profiting from a litigation tax on innovation.
While startups are scraping buy, Mr. Spangenberg is buying wine by 18-wheeler. This is not the type of activity our patent system was intended to encourage. Congress must act.