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Consider this scenario: Your company is sued for patent infringement by a non-practicing entity (aka, a “patent troll”), a holding company whose only assets are patents, and whose sole business is to file lawsuits in the hope of extracting money from the patents. To defend the case, even if the case is bogus, can be quite expensive, potentially costing your company millions of dollars.
In fact, according to a 2011 survey by the American Intellectual Property Owners Association, the average cost to defend a patent case is about $1 million when the amount at risk is less than $1 million, about $3 million when $1 million to $25 million is at risk, and about $6 million when over $25 million is at risk.