Innovation Asset Blog

Report: Patent lawsuits cost innovators $500 billion since 1990

The latest report from Boston University researchers highlighted the gravity of patent lawsuits, suggesting that inventors may have lost as much as $500 billion in legal battles over the past two decades.

The study surrounds the concept of non-practicing entities, or companies that license the patents of technology developed by other companies without any intent to sell products or services. Researchers arrived at their conclusions by observing the stock prices of patent defendants following lawsuits filed by NPEs. Accounting for the effects of general market trends and random stock fluctuations, approximately half a trillion dollars worth of inventor wealth has been lost since 1990.

"The only real beneficiaries are the lawyers and perhaps the principals of the NPE firms," report author James Bessen told CNN. "There are a lot of big losers from NPE litigation while hardly anyone benefits."

A popular defense among NPEs is the notion that they actually foster innovation. Many have their own research and development laboratories that invent technologies which are later patented, according to the source. However, the rise of frivolous patent lawsuits against technology companies may actually be providing a disincentive to innovation, particularly in the software industry, according to ArsTechnica.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.