The increasing commercial value of patents in today’s knowledge-based economy and the exponential advancement of technology have led to what many call the expansion of the patent system[1] in terms of both patentable subject matter and patents granted[2]. According to published statistics[3] the European Patent Office alone receives more than 764 patent file applications per day. This flood of patents has put patent authorities under enormous work-load pressure, lowering the overall standards for issuing a patent. On the other hand, this trend has led to the establishment of the so called “patent thickets”, which are dense webs of overlapping patents in a specific field, which a company or an inventor must overcome in order to actually develop or commercialize a potential product. This problem is amplified in the field of IT and the software industry in particular, where the cycles of improvement across quick product generations and the difficulty of patent authorities in defining the scope of the new technology have led to an enormous number of patents and higher levels of patent litigation.

On a global level, in certain jurisdictions, the enormous expenses of such lawsuits (fees, etc.) have created the possibility of a single injunction to be able to shut the defendant down. This has also created the morally-questionable practice of companies, called “patent trolls”, to file patent complaints for a living. Such organizations either make no products or supply no services based upon the corresponding patent, or have long ago lost their competitive competition on the market. Due to the costs and risks of lawsuits, defendants against “patent trolls” are willing to settle even non-meritorious suits. This pervasive threat has deterred innovation and growth in numerous sectors.

Another phenomenon, typical for the field of IT are so called “patent wars”. Patent wars represent arms races between corporation and individuals to obtain patents for litigation for either offensive or defensive purposes. Ongoing patent wars can be observed between the largest technology and software corporations worldwide. This shift of the role of patents from tools to encourage innovation into weapons that pose threat of litigation, has forced companies to focus on allocating money for building patent portfolios, which could have more effectively been spent on research and development.

[1] Burk D. L., Lemley M., The Patent Crisis and how the courts can solve it, The University of Chicago Press, 2009

[2] Van Overwalle G., van Zimmeren E., Functions and Limits of Patent Law, Facing the Limits of Law, 2009, p.415-442