Patent Reform: How do we cross the finish line?

Abstract

Over the last several years, widespread abuse of patent litigation has imposed a severe tax on domestic and international companies. A disproportionate amount of this tax is born by high technology companies, including in the telecommunications sector. The primary culprits are non-producing entities (also known as “patent trolls”) who have successfully exploited a broken patent system to extort licensing fees from target companies. Patent troll activity has continued to rise in the U.S over the last decade. While high technology/telecom companies comprise less than a quarter of Fortune 100 companies, nearly 70% of all patent litigation falls within the high technology/telecom sector. Networking giant Cisco disclosed that it spends $40 million annually on the U.S. patent system – most of which funds defensive litigation. Other telecom heavy weights such as Verizon, AT&T, and Motorola are also involved in dozens of new patent litigations initiated by trolls.