Why does patent monetization involve so much litigation? Are those that use litigation to extract settlements gaming the system?
In my humble opinion, resolving disputes through litigation is a byproduct of American culture—patent litigation is a byproduct of that culture.
To put it in perspective, other cultures aren’t as litigation prone. To provide an overly generalized example, the Japanese find it offensive that we use litigation to resolve disputes. Traditionally, the Japanese resolve disputes in a more cooperative manner, where each side is willing to see the other side’s arguments, and willingly yield if there is merit.
American history and culture, on the other hand, isn’t quite the same.
The Constitutional right to bear arms provides some insight. The Second Amendment is a fundamental right provided to all citizens—it stems from a cultural perspective that prioritizes property rights and, more particularly, the right to defend them.
To put it simply, it stems from a mentality that if you trespass on my property or try to take what’s mine, I have a right to defend myself, even with the use of force.
This similar mentality comes through with respect to defending patent enforcement efforts.
Albeit anecdotal, most companies refuse to pay for patent licenses, even when they are presented with reasonable arguments of infringement. Further, even when given an opportunity to avoid litigation, most companies ignore it.
As an example from my brokering days, when we presented companies with infringement evidence and an opportunity to purchase a patent, to thereby avoid litigation, nine times out of ten we were handedly ignored. But when we sued them on it, it got their attention and their interest to work out a deal.
We used litigation as a means to get their attention, when a sales pitch failed.
The point being, when naysayers criticize patent holders for their use of litigation, think about it from the other perspective—why do companies refuse to take licenses or make patent purchases, even when given an opportunity to avoid litigation? Why do patent holders need to sue a company, to simply get their attention?