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[ontolog-forum] [Fwd: Re: More on patents]

To: "[ontolog-forum]" <ontolog-forum@xxxxxxxxxxxxxxxx>
From: Ed Barkmeyer <edbark@xxxxxxxx>
Date: Fri, 24 Sep 2010 12:30:48 -0400
Message-id: <4C9CD238.9040401@xxxxxxxx>
A colleague of mine contributed an additional reference to Rich Cooper's 
contribution.    (01)

-------- Original Message --------
Subject:        Re: [Fwd: [ontolog-forum] (Software) Patent litigation]
Date:   Thu, 23 Sep 2010 17:24:56 -0400
From:   Guillaume Radde <guillaume.radde@xxxxxxxx>
Reply-To:       msidtechtalk@xxxxxxxx <msidtechtalk@xxxxxxxx>
To:     Multiple recipients of list <msidtechtalk@xxxxxxxx>
References:     <4C9BBC97.8050205@xxxxxxxx>    (02)



Here is another interesting paper to reference when talking about 
software patents, from american economist and Nobel price laureate Eric 
Maskin:    (03)

http://www.researchoninnovation.org/patent.pdf    (04)

Guillaume    (05)


> -------- Original Message --------
> Subject:      [ontolog-forum] More on patents
> Date:         Thu, 23 Sep 2010 12:43:08 -0400
> From:         Rich Cooper<rich@xxxxxxxxxxxxxxxxxxxxxx>
> Reply-To:     [ontolog-forum]<ontolog-forum@xxxxxxxxxxxxxxxx>
> To:   '[ontolog-forum] '<ontolog-forum@xxxxxxxxxxxxxxxx>
>
>
>
> Hi Ontologizers,
>
>
>
> Since we have recently been discussion patents wrt ontologies, this
> statistical study of patent litigation might be of interest to many
> readers of this list.  Please see below for news item posted on a patent
> list I subscribe to.
>
>
>
> HTH,
>
> -Rich
>
>
>
> Sincerely,
>
> Rich Cooper
>
> EnglishLogicKernel.com
>
> Rich AT EnglishLogicKernel DOT com
>
> 9 4 9 \ 5 2 5 - 5 7 1 2
>
> ------------------------------------------------------------------------
>
> *Bombshell Study: Heavily Litigated NPE Patents Overwhelmingly Lose at
> Trial<http://feedblitz.com/r.asp?l=50410480&f=151161&u=191723&c=0>***
>
> To date, litigated patents were viewed as "strong" patents - the types
> that defendants were supposed to avoid taking to trial.  Moreover,
> litigated patents were seen as more valuable, since they managed to
> survive an all-out attack on validity by a presumably well-financed
> defendant.  Earlier studies (John  R.  Allison  /et  al/.,  /Valuable
>   Patents/,  92  Geo.  L.J.  435  (2004)) looked at litigated patents,
> and found that they differed from non-litigated patents in that they (1)
> include more claims, (2) cite more prior art, (3) are cited more often
> by later patents, and (4) come from larger "families" of
> patents/continuations.  Each of these factors are now used in
> conventional methodologies to determine the private value of patents.
>
> John Allison
> 
><http://www.feedblitz.com/t2.asp?/151161/191723/0/http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=118168>,
> Mark Lemley
> 
><http://www.feedblitz.com/t2.asp?/151161/191723/0/http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=32215>
> and Joshua Walker
> 
><http://www.feedblitz.com/t2.asp?/151161/191723/0/http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1533021>
> recently took on the task of identifying every patent that was litigated
> eight or more times between 2000 and February 2009, including cases
> still pending, and compared the outcomes of the cases against patents
> that were litigated only once.  In the course of their analysis, they
> found 106 such patents, which have been litigated in a total of 2,987
> different patent assertions in 478 different cases, often against
> multiple defendants.
>
> What did they find?  Serial patent litigants, and particularly NPE's
> (aka "trolls"), for a lack of a better phrase, "get creamed" when they
> go to trial:
>
> [T]o  our  great  surprise,  *we  find  that  the  willingness  of
>   these  patentees  to  litigate  their cases  to  judgment  is  a
>   mistake*.  Far  from  being  stronger  than  other  litigated  patents,
>   the most-­-litigated  patents  that  go  to  judgment  are  far  more
>   likely  to  be  held  invalid  or  not infringed.  The  differences
>   are  dramatic.  Once-­litigated  patents  win  in  court  almost  50%
> of  the  time,  while  the  most-­litigated  –  and  putatively  most
>   valuable  –  patents  win  in court  only  10.7%  of  the  time.
>
>
>
> The  results  are  equally  striking  for  patents  owned  by
>   non-­practicing  entities  (NPEs), and for  software  patents.  NPEs
>   and  software  patentees  overwhelmingly  lose  their  cases, even with
>   patents  that  they  litigate  again  and  again.  Software  patentees
>   win  only  12.9%  of their  cases,  while  NPEs  win  only  9.2%.
>
>
>
> [S]tatistical  tests  bear  this  out.  We  compare  the  proportion  of
>   win  rates,  testing  the  null  hypothesis that  there  is  no
>   difference  between  the  most-­litigated  and  once-­litigated  patent
>   outcomes.  We test  the  proportions  in  several  ways,  both
>   including  and  excluding  settlements  in  the  denominator  of
> decided  cases,  and  both  including  and  excluding  default
>   judgments  as  plaintiff  wins.  *No  matter  which test  we  use,  the
>   differences  are  highly  statistically  significant  –  the
>   most-­litigated  patentees  were more  likely  to  lose*.
>
>   Also,
>
>   Considering  only  the  patents  themselves,  the  proportions  of
>   initial  ownership  by  large  and  small  entities  are  almost  equal
>   in  the  most-­  and  once-litigated  data  sets:  53.5%  of
>   most-­litigated  patents  and  47.8%  of  once-litigated  patents  were
>   issued  to  large  entities.  The  picture  is  quite  different,
>   however,  when  one  looks  at  the  proportion  of  actual  assertions
>   in  litigation,  where  large  entities  account  for  a  surprisingly
>   small  percentage  of  the  most-­litigated  patents.  Because  small
>   entities  are  disproportionately  represented  in  the  actual
>   litigation  of  most-­litigated  patents . . . patents  that  were
>   initially  issued  to  large  entities  represent  only  22.4%  of  the
>   assertions  in  the  most-­litigated  group,  compared  to  47.8%  of
>   the  once-­litigated  group.
>
>
>
> [W]hen  the  cases  do  not  settle,  large  patent  plaintiffs  are
>   significantly  more  likely  than  small  ones  to  win,  without
>   regard  to  how  the  data  are  sliced.  When  we  combine  the  two
>   data  sets,  large  entity  plaintiffs  win  53.1%  of  the  cases
>   decided  on  the  merits  (55.9%  if  default  judgments  are
>   included),  while  small  entity  plaintiffs  win  only  12.3%  of
>   their  cases  (23.1%  if  default  judgments  are  included).
>
> Other interesting findings:
>
>
>
> - Just 16.7% of the assertions of the most-litigated patents were made
> by product-producing companies.
>
>
>
> - Software patents constituted 20.8% of the once-litigated patents but
> 74.1% of the most-litigated patents.
>
>
>
> - Owners of non-software patents are far more likely to win their cases
> than are software patent owners (37.1% versus 12.9% overall)
>
>
>
> - The number of defendants per case is a negative predictor of
> settlement - the more defendants there are per case, the less likely the
> case is to settle.  Also, the more defendants there are per case the
> more likely those defendants are to win.
>
>
>
> The study concludes:
>
> We  designed  this  study  to  explore  the  effects  of  repeat  play
>   on  litigation  behavior,  contributing  to  a  literature  on  the
>   economics  of  civil  procedure  as  well  as  the  substance  of
>   patent  law.  But  what  we  found  was  dramatic  and  unexpected:
>   The  patents  and  patentees  that  occupy  the  most  time  and
>   attention  in  court  and  in  public  policy  debates  –  the  very
>   patents  that  economists  consider  the  most  valuable  –  are
>   astonishingly  weak.  Non-­practicing  entities  and  software
>   patentees  almost  never  win  their  cases.  That  may  be  a  good
>   thing,  if  you  believe  that  most  software  patents  are  bad  or
>   that  NPEs  are  bad  for  society.  But  it  certainly  means  that
>   the  patent  system  is  wasting  more  of  its  time  than  expected
>   dealing  with  weak  patents.  And  it  also  suggests  that  both  our
>   measures  of  patent  value  and  our  theories  of  litigation
>   behavior  need  some  serious  reconsideration.
>
>    Read/download "Patent Quality and Settlement among Repeat Patent
> Litigants" (link
> 
><http://www.feedblitz.com/t2.asp?/151161/191723/0/http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1677785>)
>
>
>
>
>        (06)


-- 
Guillaume Radde
Software and Systems Division
National Institute of Standards and Technology
guillaume.radde@xxxxxxxx
(301) 975-6145    (07)




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