How would raising the filing fee impact patent trolls? If you are not familiar with patent trolls, check out this excellent blog Troll Tracker. Patent trolls are companies that are set up with the sole purpose of suing other companies for patent infringement on patents that tend to be acquired from individual inventors and companies that have gone out of business.
In a recent post, Troll Tracker reviewed patent lawsuits filed against the Fortune 100 based upon the industry of the defendants in the lawsuits. The most interesting distinction was between the Pharmaceutical Industry and the High Tech Industry. Pharmaceutical had 28 total lawsuits, with 24 coming from competitors and 4 coming from Universities (etc.) but none from patent trolls. High Tech, on the other hand, had 192 lawsuits, with 35 from competitors, 24 from Universities (etc.) and 132 from patent trolls.
What is the distinction between the Pharmaceutical and High Tech industries around patents? Well, first the Pharmaceutical Industry depends on patents to survive because they tend to have a single innovation (the chemical compound used to treat disease x) the price of making a pill is next to nothing and anyone can follow a formula to make a chemical compound. High Tech companies tend to have differentiated products composed of lots of improvements that are very complicated to put together. Second, Pharmaceutical companies spend $800,000,000 to get one new product to market so the consequence of having a weak patent is huge. High Tech also spends a lot of money on new products, but they tend to grow incrementally from one product version to the next.
Pharmaceutical companies tend to have a relatively few number of extremely valuable patents that, were a company go out of business, would quickly be snapped up by a competitor, investor or other interested party, who would produce the compound. High tech companies have lots of patents on small features and if the business should cease, no one really knows the value of the patents. These patents fall through the cracks and end up with the trolls.
If the patent filing fees were raised, then High Tech companies would only file patents on their most important innovations and fewer patents would be more valuable. Thus, they would be less likely to fall through the cracks, and the patent troll market would dry up.