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. Nonpracticing entities and software patentees almost never win their cases.That is, patent trolls sue with very weak patents. Most, if not all of the patents, get invalidated in the process. Why do they do that? The authors of the paper are buffled:
Finally, our results are a bit of a puzzle for the most common law and economics models of litigation. ... they do beg the question of what is motivating the parties in these cases.I think the answer to this puzzle can be found in Daniel Kahneman's book "Thinking Fast and Slow." In the Fourfold Pattern chapter he describes risk-related behavior with low-probability loss outcome.
The most likely outcome of this confrontation is an out of court settlement which favors the troll.
Patent Quality and Settlement Among Repeat Patent Litigants. 2010, John R. Allison, Mark A. Lemley & Joshua Walker.
Thinking Fast and Slow. 2011. David Kahneman.
tags: patents, control, game, business, model, strategy