25 Patent Factoids

October 11, 2010

25 Factoids about Patents

Notes taken from the book: “Patent Failure” by James Bessen and Michael J. Meurer

  1. Patent Examiners get an average of 18 hours to read and understand a patent application and make sure that each claim is valid. Once awarded, the assignee can forbid everybody in the country to use the invention for a period of 20 years. Attempts to invalidate a patent can cost several million dollars in legal fees.
  2. The mean number of claims in a patent application had grown from 9.94 to 14.87 between 1970 and the mid 1990s.
  3. Courts resolve questions about the doctrine of equivalents (whether one invention is equivalent to another or not) about 55% as often as they resolve question of literal infringement.
  4. Only 5% of the Software patents are acquired by the Software Publishing industry. Most of the software patents are actually acquired by firms in Electronics, Telecommunications and Computer Industries.
  5. Only a small percentage of patent litigation can be attributed to the most egregious patent trolls
  6. Most patents and most litigation does not come from independent inventors. The “lonely genius inventor” is a myth of the pro-patent culture.
  7. If you are selling online, at the most recent count (in 2003) there are 4,319 patents you could be violating.
  8. If you also planned to advertise, receive payments for, or plan shipments of your goods, you would need to be concerned with approximately 11,000 patents.
  9. Continuing applications (a method that permits to keep patent claims hidden from the public) has increased seven fold since 1984 to about 120,000 per year in 2006.
  10. The terms used in patent claims are allowed to change meaning over time as technology advances.
  11. In 2001 the Court of Appeals of the Federal Circuit concluded that the definition of “point of sale location” included bedrooms, offices and anywhere else with an Internet connection.
  12. Software patents are more than twice as likely to be litigated as other patents
  13. Patents on methods of doing business, which are largely software patents, are nearly seven times more likely to be litigated.
  14. Close to 200,000 Software Patents have been granted.
  15. Software patents account for 38% of the total cost of patent litigation to public firms during the 1990s.
  16. The Court of Appeals of the Federal Circuit (CAFC) has increased its influence by expanding the range of patentable subject matter to include software, business methods, early-stage inventions and more. Normally extending the patentable subject matter should have required an Act of Congress.
  17. The expected cost of defending patent lawsuits is estimated to be about 19% of the cost of R&D investment.
  18. A legal “opinion letter” stating whether a given technology infringe on patents or not typically cost between $20,000 and $100,000 but yet carries little legal weight.
  19. The Court of Appeals of the Federal Circuit reverses the district court judge’s construction of 34.5% of the claim terms appealed and this percentage has increased over the course of the 1990s.
  20. Recent Federal Circuit cases have had to decide plausible disagreements over the meaning of the words:
    “a”, “or”, “to”, “on”, “about”, “including”, and “through”.
  21. Thomas Edison was not the first inventor of the incandescent light bulb. He had many competitors, and his light bulb built on many earlier contributions. Sawyer and Man, were two competitors who obtained a light bulb patent before Edison achieved his famous invention and they sued Edison over patent infringement.
  22. About 25% of all lawsuits between public firms involved firms that patented in very different technology classes and which were in unrelated industries.
  23. Even though the Federal Circuit has strengthened patent rights by making changes to the law that reduce the probability of invalidity, the share of district courts decisions that invalidated a patent is still 27%.
  24. A survey of members of the Intellectual Property Owners organization found that 65% disagreed with the statement: “We always do a patent search before initiating any R&D or product development effort”.   If patents were like land property, this is equivalent to say that 65% of building contractors will not check who is the owner of the land, before they start erecting a building in that piece of land.
  25. In 2002 there were about 90,000 CPU-related patents held by over 10,000 parties, and 420,000 semi/system patents held by over 40,000 parties. If patents were like land property, a building contractor will have to consult with thousands of potential owners, and evaluate tens of thousands of potential land ownership titles concerning a piece of land. The entry cost of a new firm in this space is extremely high.

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