Tech Companies Are Lawsuit Magnets

from the first-thing,-let's-kill-all-the... dept

Probably won’t come as a shock to many readers around here, but tech companies face an awful lot of lawsuits. In a survey, tech companies averaged 42 lawsuits, somewhat (though not tremendously) above the mean of 37 for an “average” company. Of course, the blurb here also doesn’t say how large the companies are or how they were chosen for the survey, so there’s plenty of room to critique it. Also not revealed is how many of those lawsuits were initiated by the company itself, as opposed to the opposing side. Update: Then again… maybe not. As pointed out in the comments, tech companies were also the most likely not to have any lawsuits — suggesting that the data was skewed by a few companies with a lot of lawsuits. Again, though, would be interesting to note the direction of those lawsuits.

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Comments on “Tech Companies Are Lawsuit Magnets”

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dorpus says:


If lawsuits per company can be viewed as a Poisson distribution, then we would compare the mean to the variance to look for evidence of overdispersion. If the overdispersion is significantly above 1, then other factors such as those mentioned above can be considered. Would the nature of the high tech industry call for a negative binomial distribution as the underlying model, where it is given that some lawsuits will occur by default? Or should we use a Quasi-Likelihood Model (QLM)?

Pete Austin says:

Actually They're Not

From a more detailed summary (my highlighting).

“Sector Specific ? The U.S. health care industry had the greatest number of pending litigation matters in the U.S., with an average of 64 cases. Energy companies were second in line with 49 pending litigation cases, followed by technology/communications (with 42 pending cases) and manufacturers (with 40 pending cases) in third and fourth. Tied for fifth were insurance providers and real estate companies (with 39 pending cases each). Filling the remainder of the field: finance (34 pending cases) and retail/wholesale (22 pending cases). By a large margin, companies in the tech/comm sector were the most likely to escape the reality of litigation, with 41% reporting that they had no matters pending against them

I assume Mike found a misleading report. The full survey is here but you have to register.

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