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A new study has found that patent litigation is getting entirely out of hand and is hurting start-ups and innovation. From 2004 to 2012 the number of patent lawsuits filed in the U.S. more than doubled from around 2,500 to more than 5,000. Not only do they slow innovation, but they bleed money from start-ups that would otherwise bring new products, jobs, and money to the market. They also scare off potential industry investors.

Much of this has occurred because patent trolling has become a lucrative business — so much so that some organizations exist for no other reason than to file patent lawsuits. Even those with very little grounds for control of an idea can litigate to the point that target companies are forced to settle just to be allowed to continue existing. Presumably, from 1995 to 2012 somewhere around $8 to $42 billion in venture capital investments were prevented by patent litigation. That’s a wide range, but even on the low end, patent trolling represents a loss of around 7% of would-be investments in the 17 year span.

You can read the study right here.

There is plenty of evidence that this is happening with the electronic cigarette industry. While some disputes certainly appear legitimate, the most common patent litigations in the industry come out of a company called Dragonite International — previously Ruyan and Golden Dragon Holdings. I’m not commenting on the legitimacy of these suits, but Dragonite has been pursuing just about every major electronic cigarette outlet since 2008 — especially those that produce small models that resemble traditional cigarettes. Many agree that their claim is dubious at best.

More than once, companies have been purchased or invested in almost immediately after they or Dragonite announced a settlement between the two.

Most experts agree that the current system not only allows, but encourages and rewards patent trolls. Certainly, when it comes to innovative industries where companies need to act fast and keep their products on the market, patent trolls can simply act as a toll booth — asking for enough to make it hurt, but not so much to stop the company. The trolls lose nothing in this bargain, but often this will scare off new investors and fresh capital that would move an industry forward much quicker.

The study is certainly worth a read. Patent reform could only help the e-cig industry, but by the time it happens, the trolls may have already moved on to other targets.