The retail industry has become the No. 1 target for lawsuits by patent trolls, including big names such as Target (NYSE:TGT), Walmart (NYSE:WMT) and Best Buy (NYSE:BBY). The number of patent troll lawsuits in retail in 2014 beat out those in electronics, media and software.
In numbers reported from the research firm Patent Freedom, so far this year, 136 retailers have been named in 264 lawsuits brought by trolls, also known as non-practicing entities. These NPEs buy patents on the open market and then look for somebody to sue for infringement, reported the Minneapolis/St. Paul Business Journal. The NPEs hope to collect licensing revenue from the infringing parties.
Other retailers that made the top 100 include Barnes & Noble (NYSE:BKS), Staples (NASDAQ:SPLS), Home Depot, Sears (NASDAQ:SHLD) and J.C. Penney (NYSE:JCP). Amazon (NASDAQ:AMZN) made the top 10 troll targets.
Many of the suits revolve around technology the retailers are using, everything from store management to mobile shopping. The trolls say that it is cheaper to sue the retailer than the company making the technology—in hopes that the retailers will settle quickly because they do not have experience with patent trolls.
For the year, Patent Freedom forecasts about 528 suits will be filed against retailers, making 2014 the second straight year in which retail was the most targeted sector, reported MarketWatch.
David French, senior VP of government relations for the National Retail Federation said that patent trolls had gone from a nuisance to a real issue.
The Consumer Electronics Association, which counts retailers including Best Buy among its members, contends that patent trolls cost the industry in terms of both innovation and capital. A Boston University study conducted in 2012 found that patent trolls cost American companies more than $29 billion each year.
*A version of this story originally appeared in FierceRetailIT's sister publication FierceRetail.
-See this Minneapolis/St. Paul Business Journal article
-See this MarketWatch blog
-See this Boston University study
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