How Patent Trolls Are Costing the Economy Billions Each Year

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Jeremy P. Jacobs
April 10, 2014, 7:06 a.m.

If you’ve got a bril­liant idea and want to start a busi­ness, be­ware the pat­ent trolls.

That’s in­creas­ingly what start-up com­pan­ies and en­tre­pren­eurs are be­ing told, as trolling—when com­pan­ies buy up tons of cheap pat­ents and profit from them by threat­en­ing in­fringe­ment suits against oth­ers, in the hope of set­tling—has be­come a pred­at­ory activ­ity that costs the U.S. eco­nomy $80 bil­lion a year, ac­cord­ing to one oft-cited study from Bo­ston Uni­versity.

Though some may dis­pute those num­bers, nearly every­one agrees that ab­us­ive pat­ent trolls are a prob­lem that has bal­looned in re­cent years, par­tic­u­larly in the soft­ware in­dustry. All three branches of the fed­er­al gov­ern­ment are now try­ing to rein them in.

Here’s what you need to know about pat­ents and the trolls that eat them—and why Wash­ing­ton is hav­ing such a hard time turn­ing them in­to stone.

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