tarball_tinkerbell writes: "The New York Times (sorry, registration required) reports: for most public companies, patents don't pay off. James Bessen and Michael J. Meurer of the Boston University School of Law have crunched the numbers and are finishing up a book on the topic, "Do Patents Work?," due in 2008 — synopsis and sample chapters here. Having analyzed data from 1976 to 1999, they found that starting in the late 1990s, publicly traded companies saw patent litigation costs outstrip patent profits. Specifically, they estimate that about $8.4 billion in global profits came directly from patents held by publicly traded United States companies in 1997, rising to about $9.3 billion in 1999, with two-thirds of the profits going to chemical and pharmaceutical companies. Domestic litigation costs alone, meanwhile, soared to $16 billion in 1999 from $8 billion in 1997.
Things have probably become worse since then. For instance, patent litigation is up: there were 2,318 patent-related suits in 1999, and 2,830 in fiscal 2006 (though that's down from the peak year, 2004, when 3,075 were filed). Mr. Bessen said awards in patent cases also seemed to be up, though he was less confident in that data. Worse, he says, companies doing the most research and development are sued the most.