There’s no question that the cost of patents is rising. Google is paying $12.5 billion for Motorola mainly for its huge mobile patent portfolio. In July, an anti-Google consortium raised $4.5 billion for Nortel’s patents (and they overpayed). Interdigital, Kodak, and others are looking to sell their patent portfolios. As my colleague Erick Schonfeld wrote recently, we are in the midst of a patent bubble. One startup, Lex Machina, is aiming to help companies gain insight into data and analytics on patent litigation. And unsurprisingly, the company’s online patent litigation database is being used by most of the top tech companies in Silicon Valley.
The company is just did a study on mobile handset litigation. According to Lex Machina’s data, mobile handset lawsuits are up roughly 25 percent a year since 2006. In fact, in August of 2011 alone, there were 294 patent lawsuits, 8 percent of which were mobile-related. Currently, Apple is involved in 97 open patent cases (here’s an example of one). Motorola Mobility is involved with 38 open patent cases.
We’ve known that there is a rise of patent trolls, taxing innovation and causing companies billions. Google Chairman Eric Schmidt recently pointed out some major flaws in the patent system, and believes that crowdsourcing is the future to reforming patents. But until any reform happens, the flawed system is here to stay.
For background, Lex Machina was spun off of a partnership between Stanford Law School and the Stanford Computer Science Department. Initially, the research behind the company was funded by the Kauffman Foundation for Entrepreneurship and companies like Apple and
Genentech. It was then spun off and funded by The Stanford Angels and Entrepreneurs and ULu Ventures.
Lex Machina is announcing free access to its service for small mobile app makers who have been sued (not a bad deal considering access is usually $10,000 per year, per seat on the SaaS model). Companies who want to request access should email firstname.lastname@example.org.