Original “patent troll” may call it quits, says there’s no money in it

jeremy · 06-11-2015, 08:53 AM

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Ray Niro, one of the lawyers who pioneered the wave of contingent-fee patent litigation, says he's ready to exit the business.

“The stand-alone patent case is dead on arrival, and I don't think we're unique,” Niro told Crain's Chicago Business.

Patent litigation dropped by roughly 20 percent in 2014, and patent lawsuits by "non-practicing entities," also known as patent trolls, dropped by nearly 25 percent. Those trolls filed about 3,700 lawsuits in 2013, and 2,800 in 2014, according to data from RPX's annual report (PDF).

There's still plenty of business left, but it's higher risk, as well. More judges are awarding fees to defendants, following the Supreme Court's decision in the Octane Fitness case last year. Niro and his firm have been ordered to pay fees in a patent suit he brought against HTC on behalf of Intellect Wireless and an inventor. The parties are still litigating over the amount, but HTC is seeking $4.1 million.

The fee order was "a wake-up call," Niro told Crain's. "I can take it once, twice, but am I going to take it three or four times? No. Why should I?"

Niro isn't the only famous patent enforcer who's considering moving on to greener pastures.

Erich Spangenberg, who has been estimated to be the driving force between more than 1,600 patent lawsuits over the years—including several cases that went to trial, like TQP Development v. Newegg—has stepped down as CEO of his patent consultancy IPNav.

There is hopefully still some patent reform coming, but this is good news.

--jeremy