Study: Startups lose $21 billion due to patent trolls

According to a new study by a professor at the MIT Sloan School of Business, patent trolls cost startups $21.772 billion in lost venture capital funding over the past five years.

Still from the trailer for 1990's Troll 2.

Still from the trailer for 1990’s Troll 2.

The study specifically focuses on actual patent trolls — companies that file 20 or more patent lawsuits — not on companies that that just occasionally sue to defend their patents.

According to paper author Catherine Tucker, higher quality patents — such as those that would get approved in Japan or the European Union — are associated with a lower level of litigation. 

So one solution to the problem is to stop awarding junk patents for dubious or obvious “inventions.” Another solution, she suggests, is to make it more expensive to file a patent infringement lawsuit.

Read the full paper here.

Read the Ars Technica interview with the author here.

 

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Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China.