Trade

Another Ridiculous Number From The Patent Wars

The software world is in the middle of a patent arms race. Everybody is suing everybody else for patent infringement. And companies are spending billions of dollars buying up patent portfolios.

Source: The Wall Street Journal, The New York Times

Source: The Wall Street Journal, The New York Times Lam Thuy Vo/ NPR hide caption

itoggle caption Lam Thuy Vo/ NPR

That part of the story is pretty familiar by now. (See our big story from last year.)

Here's another interesting data point we just came across: Roughly 40,000 software patents are issued every year.

The ridiculous number of new patents means that, even if a software company wanted to figure out whether it was infringing on any patents, it would be impossible to do so.

That 40,000 figure comes from a study co-authored by Christina Mulligan of Yale Law School. In her study, she calculates how much it would cost companies to ensure they were creating software without infringing patents:

Even if a patent lawyer only needed to look at a patent for 10 minutes, on average, to determine whether any part of a particular firm's software infringed it, it would require roughly 2 million patent attorneys, working full-time, to compare every firm's products with every patent issued in a given year. At a rate of $100 per hour, that would cost $400 billion. For comparison, the software industry was valued at $225.5 billion in 2010.

This is, obviously, impossible.

"The sad thing for large companies is billions of dollars is being diverted from running your business," said Mulligan. "Small companies can't even play this game."

Correction: An earlier version of this graphic misidentified Nortel as Norton. Thanks to the commenter who pointed out the error.

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