Here’s Why It’s More Lucrative To Be A ‘Patent Troll’ Than A Real Manufacturer

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So-called patent trolls – which don’t actually make anything –  in recent years received significantly larger damages awards on average than those won by companies that make things, a new report found.Critics of “trolls,” or nonpracticing entities, claim they hold huge numbers of patents and make money by simply attacking others with litigation.

During the 2006-2011 period, these “trolls” received a median damages payment of $6.9 million versus practicing entities’ $3.7 million, according to the study by PricewaterhouseCoopers.

This has reversed a trend from 1995-2000 when NPEs scored median damages awards of only $4.5 million to practicing entities’ $5.5 million (in 2011 U.S. dollars), according to the study.

Both NPEs and practicing entities, however, have seen their awards decrease since the 2001-2005 period.

Companies are still filing patent suits at a breakneck pace despite the decrease in damages awards, with a 22 per cent increase in case filings between 2010 and 2011.

While Congress recently passed comprehensive patent reform in an effort to cut back on the number of suits filed, the law did not address the way damages are calculated in patent cases, the study found.

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