Patent reform has become, perhaps improbably, one of the most contentious issues facing Congress and the courts over the past six years. The fights range across a number of major issues, which not only separate patent owners from patent defendants and those who believe in innovation incentives from those who believe in market competition, but also divide patent owners themselves along both industry and technology lines. Advocates on both sides paint seemingly irreconcilable pictures of the patent system, either as a stable system with clearly defined legal rights essential to innovation or as a system rampant with litigation abuse by “patent trolls” who use the legal system to divert money from innovative companies.

Far too much of this debate is based on anecdote and assumption, not real data. Pharmaceutical patent owners assume that most of the world works the way their industry does; so, too, do information technology (IT) companies. Patent trolls are variously portrayed as responsible for the majority of all patent lawsuits, for no more than two percent, or as mythical creatures that do not actually exist.

The opening of the Stanford IP Litigation Clearinghouse in December 2008 allows us to collect data that give a unique perspective on many of these debates. Using this data, we identify the patents litigated most frequently between 2000 and 2007 and compare those patents to a control set of patents that have been litigated only once in that period. The results are startling. The most-litigated patents are far more likely to be software and telecommunications patents, not mechanical or other types of patents. They are significantly different from once-litigated patents in ways that signal their value up front. And they are disproportionately owned by nonpracticing entities (i.e., “trolls”). The results do not answer all of the policy questions; we offer only one important piece of a larger mosaic. But our findings have significant implications for debates over patent reform, since we show both that the most-litigated patents are the most valuable ones and that they are most commonly in the hands of companies other than the ones building new products.