A recent PriceWaterhouseCoopers study suggests that nonpracticing entities (NPE), more commonly referred to as patent trolls, are thriving.
The largest award went to Dr. Bruce Saffran who, in 2008, was awarded nearly $432 million in damages (and, not reported in the study, another $69 million in pre-judgment interest awarded by the judge after the trial). A jury found that Boston Scientific Corporation infringed on his drug-eluting stent system patent.
Rambus, a company that at one time actually sold computer memory but now proudly bills itself as “one of the world’s premier technology licensing companies,” was recently awarded $397 million plus future royalties in a final judgment against Hynix Semiconductor. Not to be stopped, Rambus is now pursuing damages against NVIDIA, a maker of computer graphics chips. A favorable decision by the U.S. International Trade Commission (ITC) found three of five asserted Rambus patents to be valid, enforceable, and infringed by NVIDIA.
Some other highlights of the study include:
• Damages awards for NPEs have averaged more than double those for practicing entities since 1995.
• Annual median damages award has ranged from $2.2 to $10.6 million, with no discernible trend since 1995.
• NPEs have been successful 29 percent of the time overall versus 41 percent for practicing entities, due to the relative lack of success for NPEs at summary judgment; however, both have roughly a 2/3 win rate at trial.
• The disparity between jury and bench awards has widened and is likely the contributing factor in the significant increase in use of juries since 1995.
• Reasonable royalties continue to be the predominant measure of damages awards.
• Alleged infringers increase their trial success rates slightly as plaintiffs seeking declaratory judgment.
• While the median time-to-trial has remained fairly constant since 1995, significant variations exist among jurisdictions.
• Certain federal district courts (particularly Virginia Eastern and Texas Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards.
• Five federal district courts accounted for 33 percent of all identified decisions involving an NPE as the patent holder.
Source: “2009 Patent Litigation Study: A Closer Look – Patent litigation trends and the increasing impact of nonpracticing entities,” PriceWaterhouseCoopers, 2009.
“Rambus, a company that at one time actually sold computer memory…”
Rambus NEVER sold computer memory. The founders behind Rambus invented revolutionary new ways to speed up memory systems and solved the cpu/memory bottleneck. They never planned on manufacturing but rather to license their intellectual property. A few very large companies; Samsung, Hynix, Siemens, Micron and Nvidia choose to not take a license and just incorporate Rambus’ inventions anyway. The law suits started and Micron and Hynix sued Rambus (not the other way around) on opposite coasts one day apart. Rambus is not and never was a patent troll but when your property is stolen from companies who had been presented the solutions under non-disclosure you defend yourself. Luckily for Rambus companies such as Intel, IBM and Toshiba took licenses and this gave them enough funds to pay the astronomical legal fees.
I am shocked at the heading of your article and it makes one wonder what the intention behind that heading is when the article contains completely false information!
Rambus has never been anything but a patent troll. The core of their business model is the use of submarine patents. Internal Rambus documents released as part of their court case in 2001 clearly demonstrated an intention of using submarine patents.