A recent article in the Economist highlighted the remarkable growth of Class 705 patents since they were made possible (see chart below, taken from that article):
While I am personally not a fan of such patents, I can understand why people would find them attractive, and why the number of patents sought in that class would mushroom. What really caught my notice was the passing reference to Josh Lerner’s work in this area:
Research by Josh Lerner of Harvard Business School found that patents on financial innovations were 27 times more likely than average to result in litigation. The defendants in these suits tend to be big investment banks and other financial institutions. Mr Lerner discovered that the most frequent plaintiffs in such lawsuits are patent-holding companies whose only line of business is the litigation of patent suits.
Now that is sad. “…the most frequent plaintiffs in such lawsuits are patent-holding companies whose only line of business is the litigation of patent suits“.