End Software Patents earlier claimed that the US economy suffers an $11 billion hit each year due to needless software patents. It turns out that End Software Patents was wrong.
The number is actually $30.4 billion.
What's $20 billion between friends? The group revised upward its earlier, more conservative estimates based on the following [PDF]:
- The U.S. Courts reported 2,830 patent lawsuits (of all kinds) filed in FY2006.
- Bessen and Meurer estimate that as of 2002, 25% of patent infringement suits are over software; all signs indicate that the current number is much higher, but we must use the latest available data.
- Bessen and Meurer use an inclusive measure of the costs due to software patent litigation that find a mean cost per suit of $43 million in current dollars.
- Multiplying these together, we find costs of $30.4 billion per year due to software patents.
No matter how the number is calculated, the results are the same: needless, wasteful patent litigation that helps no one except attorneys.
$11.4 billion is wasted each year on software patent litigation, according to the End Software Patents coalition. How did it get to the $11.4 billion figure?
- Dan Ravicher of the Public Patent Foundation estimates that 55 software patent suits are filed every week.
- The American Intellectual Property Lawyer's Association states that a single mid-sized patent suit costs $4 million to litigate.
That's a lot of billable hours. However, it's perhaps not surprising given that patent swine like Global Holdings illegitimately attempt to extort patent royalties from unsuspecting enterprises:
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