The October Rundown

Patent Litigation: Most Companies Are at Risk

It might seem that only high-tech giants are vulnerable to patent infringement lawsuits, but any company that simply uses patented technology in its day-to-day business operations is equally at risk. Here’s why:

  • Patent trolls—the entities that are responsible for the majority of patent risk—target not only companies that make technology, but also those that sell it or use it.
  • They identify patents that cover broad technology areas, so they are able to sue many companies for infringing on that technology—often hundreds in a single campaign—for the purpose of extracting payments.
  • More than 11,000 companies have been sued by these entities since 2010, and every year approximately 1,500 companies are targeted for the first time.

 

For all of these companies, insurance can help them control costs, which can easily spiral to millions of dollars for a single suit. With insurance from RPX, not only do companies enjoy the benefits of a traditional claims paying policy, they can also reduce their total time in litigation by half, and can cut their per case litigation costs by as much as 60%.

Question of the Month

Do my clients really have patent litigation risk?

Yes. Any company that makes, sells, or even just uses technology is at risk of being sued for patent infringement. Patent risk is far more pervasive than most observers—even GCs and corporate risk managers—realize. Every year, thousands of companies are accused of patent infringement, either directly or through shared liability with their customers, with resolutions costing potentially in the millions.

Patent troll risk is more prevalent. Since 2010, more than 11,000 companies have been sued by patent trolls who acquire patents only to accuse other companies of infringement and generate payments. Annually, they sue some 2,500 companies, and roughly half are being sued for the first time. Most of these are smaller companies, with revenues of less than $100 million, and are least prepared to handle this risk on their own.