Apple is the company most targeted by patent trolls
Apple, HP and Samsung have been attacked the most by so-called “patent trolls” within the last five years, a Silicon Valley lawyer said Tuesday. But recent legislative activity may be weakening their power.
Context & Ripple Effects
The ranking lands mid-arc for Apple, which had already been forced to engage the trolling economy directly: in December 2011 it settled with and licensed patents from a shell company rather than fight, a deal critics framed as paying tribute to the business model itself. The same wave was hitting smaller players — app developers had been sued over patent claims earlier that year — showing the litigation was not confined to deep-pocketed handset makers.
Apple's own response has been to arm up defensively, including taking over former Nortel patents in late 2012 alongside partners. The lawyer's claim that HP and Samsung round out the top three targets frames trolling as a tax on scale in consumer tech, while the flagged legislative activity points at Washington as the potential circuit-breaker.
First-order effects
- Apple, HP and Samsung carry the industry's largest direct legal burden from non-practicing-plaintiff suits over the past five years, with Apple absorbing the heaviest volume of filings.
Second-order effects
- Operating companies keep buying defensive patent portfolios — Apple's move on the former Nortel assets being the template — which inflates prices for large patent lots and pushes small developers toward settlements they cannot afford to litigate.
Third-order effects
- If the legislative push holds, the suit-for-license business model loses leverage against big targets, but the economics documented since 2010 suggest suits will migrate down-market toward defendants least able to mount a defense.
The trend: Patent assertion is consolidating into a licensing-extraction business aimed first at platform-scale hardware makers, with the pace of any correction set by Congress rather than the courts.