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This paper delves into the proliferation of non-practicing entities (NPEs), a hot topic in academia and public policy, especially in the United States. The common belief is that Europe is less exposed to NPEs due to a robust patent system, higher enforcement costs, and smaller damage awards. Yet, using a new database of NPE patent applications at the European Patent Office (EPO), the study uncovers that NPEs activity in Europe is arising: they own nearly 20,000 EPO patents, primarily in Electrical Engineering. Moreover, we contribute the literature investigating the heterogeneity of the NPE business model and its relationship with the characteristics and use of the patents they target. Our econometric analysis provides threefold original evidence. First, NPEs with higher propensity for litigation (i.e. "Litigation" NPEs) acquire patents with higher infringement risk but similar technological quality than practicing entities. Second, patent aggregators (i.e. "Portfolio" NPEs) and technology companies (i.e. "Technology" NPEs) acquire higher-quality patents compared to those acquired by practicing entities. Third, patent acquisitions by "Litigation" NPEs and "Portfolio" NPEs reduce the subsequent use of protected technologies. [ABSTRACT FROM AUTHOR]

I study the effect of patent-infringement claims by patent trolls on acquisitions of small firms. Exploiting staggered adoption of state anti-patent troll laws, I find that the laws have two effects. First, the number of acquisitions of small firms declines after these laws are adopted. Second, the anti-troll laws increase the acquisition price for acquirers. The market reflects the increased cost of acquisition as measured by lower acquisition announcement returns. Large firms increase R&D after the adoption of state laws, replacing external innovation. Using a sample of acquisitions that are plausibly unaffected by the laws, I disentangle alternative explanations. [ABSTRACT FROM AUTHOR]

Research Summary: Non‐practicing entities (NPEs) are firms that accumulate and acquire patents but do not further develop or implement the patented inventions (known as patent trolling). NPEs seek to receive royalties or profits through out‐of‐court settlements in patent infringement cases. We examine how firms targeted by NPEs in NPE‐initiated litigations (i.e., target firms) shift their innovation strategies and trajectories in response to heightened litigation risks. We theorize and show that after the initial lawsuit, target firms draw more upon their in‐house technologies to reduce the legal ground for further lawsuits. Furthermore, nontarget firms in related technology areas shift their innovation activities away from those of target firms under high NPE litigation risks. These effects are more pronounced with higher innovation costs and under more competitive product markets. Managerial Summary: Non‐practicing entities (NPEs) are known as patent trolls that accumulate and acquire patents but do not further develop or implement these patented inventions. These patent trolls aim to obtain royalties or profits through out‐of‐court settlements in patent infringement cases. We investigate how firms targeted by patent trolls in litigations (i.e., target firms) change their innovation strategies and trajectories to deal with increased NPE litigation risks. After the initial lawsuit, we find that these target firms use their in‐house technologies more to reduce the legal ground for future lawsuits. Moreover, nontarget firms in related technology areas move their innovation activities away from those of target firms under high litigation risks. These effects are stronger when innovation costs are higher and under more competitive product markets. View Video S1 [ABSTRACT FROM AUTHOR]

Patent monetisation is an important source of revenues worldwide. This activity is increasingly carried out by patent assertion entities (PAE), which are at the origin of about 40% of infringement actions filed in the United States. This paper uses an original database of US patents reporting PAE patent acquisitions. We document two key empirical facts about the presence of PAEs in the market for patents. First, PAEs build large patent portfolios and contribute significantly to patent transfers in the US. Second, their impact on follow-on innovation is, on average, negative. With a series of dynamic diff-in-diffs analyses, we estimate a significant post-transfer drop in forward citations received by patents acquired by PAEs. This drop is not immediate but takes some years to materialise. Heterogeneity tests show that our results are driven by acquisitions of old and highly cited patents, as well as by patent acquisitions by large patent aggregators. [ABSTRACT FROM AUTHOR]

The United States patent system is designed to be a balance: in exchange for the inventor disclosing their invention to the public, patentees are granted exclusive rights to that invention for a period of time. This ensures that patentees are adequately compensated for their innovation and society at large benefits from the patent's disclosure. This balance is now broken. Over recent years, patentees -- particularly non-practicing entities -- have been permitted to seek and recover unreasonable damages that stretch far beyond the value of the technology they invented. This has had serious and negative consequences: excessive patent damages discourage innovation, increase risk and cost of production, and, in turn, increase the cost of products to consumers. Patent law has a solution to this broken balance: apportionment. This principle, which dates back to the nineteenth century, holds that damages must be limited to the value of just the patented invention and cannot capture the value of other features or technology. When applied as intended, apportionment ensures the patent balance -- patentees recover the value of what they invented but no more. But therein lies the problem: in recent years, many courts have been backsliding from the principle of apportionment. First, some courts have permitted plaintiffs to rely on "built-in apportionment" to bypass apportionment entirely. Second, some courts have failed to properly apply Daubert and Federal Rule of Evidence 702 to exclude unreliable apportionment theories, particularly where experts purport to use regressions or conjoint survey analysis. The Federal Circuit and district courts should take action to correct the skewed balance caused by improper application of apportionment law. The Federal Circuit should end the "built-in apportionment" exception to apportionment and district courts should do the hard work at the Daubert stage of ensuring that apportionment is effective and reliable. Inventors, businesses, and the balance upon which the patent system was built depend on it. [ABSTRACT FROM AUTHOR]

Despite its benefits, the online environment fosters darker consumer behaviours including conflict, revenge, and aggression. Trolling has recently entered the marketing lexicon and poses a substantial threat for consumers and brands. However, current understandings of trolling are limited by a lack of empirical research, and a focus on undiscernible 'trolls' and their behaviours. Accordingly, the term 'trolling' has become a catch-all to describe almost any online misbehaviour. This research takes a broader perspective by examining the historical and discursive conditions that have produced trolling and its social practices. Combining a Foucauldian archaeology with marketing practitioner interviews, this study contributes a comprehensive understanding of trolling as a social phenomenon, the social practices that constitute it, and how trolling is enacted within consumer-brand interactions. [ABSTRACT FROM AUTHOR]

This Article describes how the original understanding of properly granted patents, from Renaissance Italy to the Patent Act of 1836, generally required tangible proof of the thing to be patented's immediate commercializability and its benefits to society at large, along with ready access to courts or other means to challenge improperly-granted patents (under ordinary standards of proof), as such improperly-granted patents were understood to constitute unjust monopolies that deterred, rather than facilitated, desired innovation. That original understanding is then contrasted throughout to the patent litigation system as it exists in America today in which challengers of improperlygranted patents are effectively denied access to court, while "patent trolls" can come to own vaguely-worded or overly-broad patents that should never have been granted and, without ever producing anything themselves, assert those patents in court under a "presumption of validity" to extort resources from productive enterprises that, unlike the trolls, are making products people want. The situation now--in which the original understanding of the purpose of the patent laws is so diametrically opposed to patent law's operation today--invites reform by supporters of the patent law's original design. [ABSTRACT FROM AUTHOR]

This article discusses the obligations of physicians under the Physicians Act and the Medical Care Act. First, the emergency treatment obligations of physicians are applicable only when they are performing their business, and not when they are not in practice. As for the emergency medical care behavior of the physicians in the nonpracticing state, it should be qualified by applying the provisions of the Emergency Medical Services Act. In addition, the physicians in the performance of business, if the breach of emergency obligations, it has created the risk of the law does not allow, in accordance with the current scholars' insights, will constitutes a negligence crime. [ABSTRACT FROM AUTHOR]

We explain why competing firms form collective entities to buy patents from other entities, particularly from non-practicing entities (NPEs), and follow a catch and release patent strategy. We show why having competitors bid as a single unit is better than having competitors bid against each other. More important, we show that collusive bidding on patents held by NPEs, even when the patents are not essential for a standard (SEPs), may increase consumer surplus, particularly when technological innovation is drastic, and improve social welfare. This provides a theoretical foundation that explains why competition authorities often allow collusive bidding for patents and why courts employ the "rule of reason" to analyze agreements under competition law. We also show that a cartel of incumbents will always outbid a potential entrant, or a patent assertion entity, over a technology that can destroy the value of the incumbents' existing assets. [ABSTRACT FROM AUTHOR]

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The paper investigates the relationship between demand, innovation and research intensity (R&D to output and patents per millions of hours worked) in different groups of industries. These relationships were investigated using disaggregate industry-level data from EU KLEMS, ANBERD and USPTO, in a sample that comprises 12 industries in 18 countries over 1977–2006. The results reported in the paper indicate that demand exerts a positive and significant impact on innovation, measured by R&D expenditure and patents. Moreover, this impact is stronger in high-tech industries than in low-tech ones. The paper also provides evidence that demand does not impact research intensity, despite its impact on innovation. This finding holds both for low-tech and high-tech industries, using both R&D to value added and patents per millions of hours worked as measures of research intensity. This suggests that research intensity is not influenced by demand growth, but most likely depends on the quality of each country's National Innovation System. [ABSTRACT FROM AUTHOR]

Importantly, if that company had dissolved after Henry Ford ended his employment there, all the firm's assets may have been liquidated to pay for its closing expenses.[72] Selden could not sue a company that no longer existed, nor could he sue Henry Ford or Ford Motor Company for a patent reassigned to a bankrupt firm that had dissolved its business ties. By coalescing behind the Selden automobile patent, all vehicles manufactured by Winton's firm had to be marked with signage that stated the date and patent number from the information presented on the Selden automobile patent certificate. In 1895, George Baldwin Selden patented an American automobile that utilized an updated Brayton-style engine. According to the Ford Motor Company and C. A. Duerr's response to the EVC bill of complaint with the US Circuit Court of the Southern District of New York, the original Selden automobile patent changed in many different ways as the sublicensees expanded on the design specifications of their "honest" vehicles.[52] For example, during the Selden case, the Rochester-Selden - the first vehicle based on Selden's patent specifications - was constructed by Henry R. and George B. Selden Jr.[53] Subsequent vehicles were redesigned and manufactured differently from the original Selden prototype. [Extracted from the article]

To what extent and with what effect do owners of standard-essential patents (SEPs) "hold-up" companies that produce standard-compliant products? To explore this question, we construct measures of opportunistic patent licensing behaviors using detailed information collected from the dockets of U.S. patent cases filed (2010–2019) to enforce SEPs and a matched sample of non-SEPs. Overall, we find evidence of at least one opportunistic behavior by the patent enforcer in approximately 77% of SEP and 65% of non-SEP assertions in court. However, these figures mask important heterogeneity across types of conduct. There is significantly more opportunistic conduct that tends to increase a potential licensee's loss if the patent enforcer prevails in court: 35% of SEP assertions versus 10% of non-SEP assertions. In contrast, conduct that tends to increase a potential licensee's litigation costs is less common, and the difference between SEP assertions (8%) and non-SEP assertions (6%) is small. We also show that opportunistic behavior is associated with case settlement, with the direction and strength of the correlation depending on the type of opportunistic behavior. Behavior that increases a potential licensee's litigation costs is associated with an increase in the probability of settlement, while behavior that increases a potential licensee's loss if the patent enforcer prevails in court is negatively associated with settlement. [ABSTRACT FROM AUTHOR]

We analyze the extent to which private defensive litigation insurance deters patent assertion by non-practicing entities (NPEs). We study the effect that a patent-specific defensive insurance product, offered by a leading litigation insurer, had on the litigation behavior of insured patents' owners, all of which are NPEs. We first model the impact of defensive litigation insurance on the behavior of patent enforcers and accused infringers. We show that the availability of defensive litigation insurance can have an effect on how often patent enforcers will assert their patents. We confirm this result empirically showing that the insurance policy had a large, negative effect on the likelihood that a patent included in the policy was subsequently asserted relative to other patents held by the same NPEs and relative to patents held by other NPEs with portfolios that were entirely excluded from the insurance product. Our findings suggest that market-based mechanisms can deter so-called "patent trolling." (JEL: G22, K41, O34) [ABSTRACT FROM AUTHOR]

We study how innovative firms manage their innovation portfolios after filing for Chapter 11 reorganization using three decades of data. We find that they sell off core (i.e., technologically critical and valuable), rather than peripheral, patents in bankruptcy. The selling pattern is driven almost entirely by firms with greater use of secured debt, and the mechanism is secured creditors exercising their control rights on collateralized patents. Creditor-driven patent sales in bankruptcy have implications for technology diffusion—the sold patents diffuse more slowly under new ownership and are more likely to be purchased by patent trolls. This paper was accepted by Gustavo Manso, finance. [ABSTRACT FROM AUTHOR]

Research summary: Patent assertion entities (PAEs) are intermediaries that acquire patents from inventors and license them to firms that use the intellectual property to develop products. We consider how PAE intermediation influences inventor behavior by reducing the costs to monetize their inventions. Using a proprietary dataset that tracks PAE lawsuits, we find that, as PAE intermediation for a given class of technologies increases, larger numbers of focused inventors (i.e., small firms, universities, and labs) that typically lack commercializing capabilities begin to produce inventions in this class. Further, we find that, compared to their larger counterparts, focused inventors are particularly responsive to increasing PAE intermediation by producing greater numbers of inventions, albeit inventions that likely advance the state of the art only incrementally. Managerial summary: Patent assertion entities (PAEs) serve as brokers of intellectual property by purchasing patents from inventors and licensing these patents to firms that develop products based on them. We investigate how PAE brokerage activities influence inventors. We find that as PAEs become more active in a particular class of patents, inventors who lack commercialization capabilities (e.g., small firms, universities, and research labs) are particularly prone to both begin patenting and increase their rate of producing patented inventions in this patent class. We also find, however, that as PAEs become more active in a given patent class, patented inventions produced by inventors lacking commercialization capabilities are increasingly incremental in nature as compared to patented inventions produced by larger firms that commercialize products. [ABSTRACT FROM AUTHOR]

The article considers whether the U.S. might benefit from a strict pleading standard for direct infringement by comparing its pleading standard to that of the United Kingdom. It mentions discrepancy in the prevalence of patent trolls between the two countries might indicate that a stricter pleading standard like that in the United Kingdom might help the U.S. in its fight against patent trolls.

Many patent assertion entities (PAEs) hide behind multiple unknown subsidiaries or shell companies with obscure ownership. Meanwhile, the United States Patent and Trademark Office (USPTO), like many other patent offices, does not impose a strict time period for recording the change of ownership of a patent, allowing the holder to gain an advantage by controlling the timing of its ownership disclosure. In this paper, we study to which extent PAEs delay the recording of the U.S. patent reassignments of patents that they will subsequently use in infringement patent lawsuits. On average, PAEs notify the change of ownership more quickly than producing firms, but this is not the case for the patents that they will litigate relatively far in time. In particular, the correlation between the recording lag of the patent transaction and the litigation spell is higher when the patent acquirer is a PAE (than when it is a producing firm) or when the acquirer will litigate the patent in the Eastern District of Texas, famously home to opportunistic litigations. Finally, we find that transactions involving unknown subsidiaries of PAEs are recorded at the USPTO significantly later than those involving PAE parent companies or their known subsidiaries. [ABSTRACT FROM AUTHOR]

The five years since Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014) have witnessed an explosion in patentable subject matter decisions ‐‐ and in political controversy over the doctrine. To its critics, Alice renders important inventions in medical diagnostics, biotechnology, and information technology unpatenable and therefore discouraging investment in critical market sector innovation. To its defenders, Alice offers a reliable, quick, and cheap way to invalidate weak patents owned by patent trolls, reducing patent holdup and protecting innovators. In response to these debates, we explore how the courts actually use Alice. We construct a unique dataset of every district court and federal circuit decision on patentable subject matter from July 2014 through June 2019 and categorize the patent plaintiffs in each case using the Stanford NPE Litigation Database. Once in court, patentable subject matter challenges are far more common in software/IT cases, and biotech/life science innovations are more likely to survive. Surprisingly, the entities most likely to lose their patents are not patent trolls but individual inventors and inventor‐started companies. Our findings have important implications for current legislative and judicial disputes over patent reform as some of the patent owners most impacted may be overlooked. [ABSTRACT FROM AUTHOR]

The article offers information on the Great Britain Supreme Court's approach to standard essential patent protection in Unwired Planet v Huawei. Topics include eating a small slice from a very large cake may be more rewarding than consuming all of a much smaller confection, the user of the standard will require to use also the patented elements, and the patent owner will be entitled to a return for use of their technology.

Using 23 867 standard essential patents claimed for three different wireless telecommunication standards (GSM, WCDMA, and LTE), this research examined the difference in technological importance and breadth of patents between practicing and non‐practicing entities. We discovered that compared to manufacturers and service providers, organizations who do not appropriate innovation‐derived profits directly from product or service markets tended to have relatively low‐quality but broadly scoped technologies for the claimed standard essential patents. These relationships between the characteristics of inventions and the organizational types were consistently held across different generations of wireless standards as indicated by regressions run for each sample split by generation. Furthermore, the theory and policy implications of our results and arguments are presented herein. [ABSTRACT FROM AUTHOR]

We provide the first large-sample evidence on the behavior and impact of nonpracticing entities (NPEs) in the intellectual property space. We find that, on average, NPEs appear to behave as opportunistic "patent trolls." NPEs sue cash-rich firms and target cash in business segments unrelated to alleged infringement at essentially the same frequency as they target cash in segments related to alleged infringement. By contrast, cash is neither a key driver of intellectual property lawsuits by practicing entities (e.g., IBM and Intel) nor of any other type of litigation against firms. We find further suggestive evidence of NPE opportunism: targeting of firms that have reduced ability to defend themselves, repeated assertions of lower-quality patents, increased assertion activity nearing patent expiration, and forum shopping. We find, moreover, that NPE litigation has a real negative impact on innovation at targeted firms: firms substantially reduce their innovative activity after settling with NPEs (or losing to them in court). Meanwhile, we neither find any markers of significant NPE pass-through to end innovators, nor of a positive impact of NPEs on innovation in the industries in which they are most prevalent. This paper was accepted by Tyler Shumway, finance. [ABSTRACT FROM AUTHOR]

The patent system features a centralized structure almost from end to end. The United States Patent and Trademark Office (PTO) possesses power to examine inventions, publish patents, and increasingly manage post-examination proceedings. The centralized nature of the patent system leads to well-known inefficiencies, including production problems, low quality patents, and information inefficiencies. Yet, despite intense criticism, and even proposals to 'demonopolize' the agency, the PTO's dominance persists, and has in fact increased with the recent enactment of the America Invents Act (AIA). This Article considers an alternative, decentralized, patent system. Harnessing new developments in database technology, I propose that inventors would submit patent applications to a shared patent record instead of to the PTO. After a grace period, in which inventions would remain secret, the record would open to the public and the patent examination process would ensue. Following the examination, granted patents would be published to the record. During the examination process and throughout the lifetime of the patent, industry and state actors would be able to dynamically update the record. For example, third parties would be able to submit prior art, scientists--to weigh in on obviousness, patentees--to offer licenses, and courts--to list decisions and outstanding cases that pertain to the patent. A decentralized patent model fosters a participatory and dynamic patent record and promises to transform the record into a central tool in the innovation economy. This strategy would yield several key benefits. First, it would boost the quality of patent examination and improve productivity, by allowing knowledgeable parties to shoulder some of the tasks that examiners now perform alone. Second, it would spur innovation by advancing information on new inventions and reduce waste by preventing a race for patents that have already been filed. Third, it would allow inventors to avoid innocently infringing patents that are strategically held by 'patent trolls,' tackling one of the most troubling issues in patent law. Finally, decentralization would facilitate patent licensing, thus driving the adoption of new inventions in the market. Improved licensing forecasts would also produce a dynamic effect: increasing the potential reward of patents ex post, thus boosting the incentive to invent ex ante. [ABSTRACT FROM AUTHOR]

Since 2011, several papers and articles have speculated about the motivations, activities, and possible anti‐competitive effects of hybrid patent assertion entities (PAEs) or, more pejoratively, "patent privateers." Most prior work has assumed that privateers are essentially extorting money from firms by making weak infringement claims employing weak patents. Under a more classical law and economics approach, we would expect patent privateers to acquire valuable patents to reduce litigation risk and justify patent enforcement. However, to date, there has been no quantitative analysis on this form of patent holder to support or disprove either of these theoretical viewpoints. This article takes a first step toward filling that gap in the analysis by conducting an empirical assessment of patent lawsuits filed between 2010 and 2013. Although several studies have provided useful analysis on who litigates patents and which patents are more likely to be litigated, we add new variables and insights to the analysis. First, our dataset identifies the business models of the parties involved, including hybrid PAEs. Second, we include data on patent reassignments, which allows us to identify when a hybrid PAE takes (partial) possession of a patent. Third, for making comparisons between litigated and unlitigated patents, our dataset includes a set of unlitigated patents that match our litigated patent dataset on several key variables. In this work, we explore three interesting questions: (1) What patent characteristics predict a patent's acquisition by a hybrid PAE? (2) Do hybrid PAEs acquire patents that are more likely to be litigated? and (3) Does reassignment to a hybrid PAE affect the time when a patent is first asserted in litigation? We find that hybrid PAEs tend to acquire patents in the information technology, surgery, and medical instrument fields more often than patents in other technology areas. Hybrid PAEs also obtain relatively higher‐quality patents than average, but objective quality metrics generally are on par when compared to patents litigated by firms with other business models. Our analysis also suggests that hybrid PAEs prefer patents with a broader scope of protection. Reassigning a patent to a hybrid PAE is generally associated with higher odds that the patents will be litigated. Finally, patents held by hybrid PAEs at some point in their lifespan experience their first litigation later than those never held by a hybrid PAE. In short, our analysis suggests that patent privateers appear to be focused on improving the possibility of successful patent monetization by focusing on acquiring higher‐quality patents with a broader scope of protection, as value and scope are perceived by economists. This research is consistent with the law and economics theory that hybrid PAEs acquire valuable patents and not the extortion theory that they acquire weak patents. [ABSTRACT FROM AUTHOR]

Patent assertion entities (PAEs) are playing an increasingly active role in Europe. Their activities are controversial in that although they may be a source of efficiencies, they may also create anticompetitive harm. Given the growing trend of operating companies transferring patents to PAEs to increase their licensing revenues, the risks of anticompetitive harm created by PAE activities must be taken seriously. When analyzing the impact of PAE activities on competition, a distinction must be drawn between "pure" PAEs, which acquire patents from a variety of sources and generate revenues by asserting them, and "hybrid" PAEs, which acquire patents from operating companies and maintain a relationship with these companies postacquisition. Although pure PAEs create risks of exploitation, hybrid PAEs create exclusionary concerns as such PAEs may be used by operating companies to harm their rivals on downstream product markets. These exclusionary concerns are particularly serious when the operating company retains a significant degree of control over the PAE's activities following the transfer of the patents. As there is currently no EU competition case-law on the activities of PAEs, this article attempts to show through hypotheticals that depending on the circumstances of each case, privateering may lead to exclusion. JEL: K21, K41, L24, L40. [ABSTRACT FROM AUTHOR]

Healthy organisms inevitably produce cancer cells, and vibrant patent systems inevitably let bad patents slip through. These patents are harnessed by entities that leverage the uncertainty and expense of litigation to extract licenses from technological practitioners. Postissuance patent review (PIPR) has emerged as an invaluable error-correcting mechanism to prevent the socially harmful assertion of improperly issued patents. The United States, with the America Invents Act, established a new system for PIPR, expanding administrative routes to curtail bad patents. Europe is going a step farther with the Unified Patent Court Agreement (UPCA). The UPC A enables a lowcost patent revocation action on a broad range of grounds and with a relaxed standing requirement. But this is an opt-in system with a loser-pays fee-shifting arrangement. Thus, although the structure of the Unified Patent Court (UPC) appears to be set up to facilitate efficient PIPR, the disincentives for opting in suggest that the UPC will be a less effective troll-fighting vehicle than expected. Indeed, patent trolls may simply opt for national patent systems. [ABSTRACT FROM AUTHOR]

This article develops a model of patent trolls to understand various litigation strategies employed by nonpracticing entities (NPEs). When an NPE faces multiple potential infringers who use related technologies, it can gain a credible threat to litigate even when it has no such credibility vis‐à‐vis any single potential infringer in isolation. This is due to an information externality generated by an early litigation outcome for subsequent litigation. Successful litigation creates an option value against future potential infringers through Bayesian updating. We discuss policy implications including legal fee shifting and the use of injunctive relief. [ABSTRACT FROM AUTHOR]

This study examines the threat of "patent trolls" to businesses, particularly small and medium-size enterprises (SMEs), and offers suggestions on how to handle this threat. Patent trolls are Non-Practicing Entities (NPEs) whose business models are based on litigation, not protecting and fostering innovation. Studies have shown deleterious effects of this rampant nuisance litigation, effectively reducing innovation and costing businesses millions of dollars responding to this threat. However, legislative and judicial reforms are having impact, and fighting this threat in the legal arena is becoming more effective. [ABSTRACT FROM AUTHOR]

Most of the available evidence on patent assertion entities (PAEs) is coming from the United States, while little is known for Europe. The up-coming Unitary Patent (UP) and the Unified Patent Court (UPC) system are considered to be game-changing elements for strategic patent options and for patent assertion activity in Europe. Many patent practitioners are watching Europe as the future market place for patenting. PAE activity in Europe is increasing and one reason for this trend is that PAEs originating from the United States are becoming more active in Europe. In the future, fuzzy boundaries of patent claims in general and of software-related claims in particular, new combinations of technologies and enhanced interoperability under the schemes of Industry 4.0 and the Internet of Things could attract PAE activity in technological fields where it has not been seen before. Altogether, some of the features of the new UPC have the potential to play into the hands of PAEs in Europe. The future will much depend on the implementation of the new UPC system, how the different divisions of the court will establish case law decisions and how PAEs will make use of the new system. The intention of the article is to provide an overview of ongoing PAE activity in Europe and to assess the future strategic options of PAEs in Europe based on the design of the new UP and UPC system. [ABSTRACT FROM AUTHOR]

The US has made significant progress in the patent legislation landscape as evidenced by the US Patent Act in the Constitution and America Invents Act (AIA) of 2011. Nevertheless, patent suits by non-practicing entities (NPEs) have been on the increase over the past ten years. Major corporations, especially, such as Apple and Samsung have been on the receiving end of the litigation as NPEs target their large cash holdings. A closer look at the patent laws in the US and Europe reveals subtle differences in the grace period, publication of patent, and the application of patent rights across member states. Given the preceding facts, vital action points for the European market include the enactment of laws that prevent patent trolls as opposed to punishing NPEs after the act and reduction of litigation costs for lowquality patents. [ABSTRACT FROM AUTHOR]

Inter partes review (IPR) is one of several mechanisms for vetting patents after they have been granted. While the purpose of IPRs is to provide a cheaper, more expert alternative to litigation for screening out bad patents, the devil is in the design details. For example, the inclusion of key procedural features in IPRs, such as fixed time frames and expanded discovery contributed to making it far more popular than its predecessors. As the United States weighs additional changes to the administration of IPRs, including expanding the basis for amendment and unifying standards of review, it is worth considering the experiences of the European Patent Office (EPO) and Germany with their parallel opposition and nullification (revocation) procedures. This Article compares and contrasts U.S. IPR, EPO opposition, and German revocation actions and explores what they suggest, collectively, about the optimal design of post-grant review systems. Despite heightened concerns in the United States about IPR invalidation rates, outcomes are comparable across the three venues: 81% of reviewed claims and 26% of claims challenged in U.S. IPR proceedings are cancelled; 68% of patents reviewed and 63% of patents challenged in EPO opposition proceedings are amended or canceled; and 73% of the patents reviewed and 28% of the patents challenged in German revocation proceedings are partially or fully invalidated. But seemingly slight differences have contributed to the distinct roles each proceeding plays in its domestic patent system. The relative slowness of German infringement actions has translated into a parallel district action stay rate of 10-15%, as compared to an 80% stay rate among U.S. district court litigations that proceed in parallel to the IPR. Patentees also have fewer rights in U.S. IPRs than they do in EPO opposition proceedings, but have substantial rights to amend and can expect consolidated challenges. Focusing on how small differences have had big impacts on procedural and substantive outcomes, this Article discusses the implications of features such as the ability to amend and pre-institution decisions on the design and efficacy of post-grant patent reviews. [ABSTRACT FROM AUTHOR]

This paper examines the confluence of two important issues concerning patent law. The two issues are the merits of the debate concerning the supposed "patent troll" crisis and the increased patenting and licensing of university and other nonprofit inventions, including the litigation of those patents. First, there is a debate in the literature concerning the presence and scope of the problem concerning so-called "patent trolls." To some, supposed "patent troll" behavior is ordinary litigation behavior, and to others, it points to problems with the patent litigation system. Indeed, some may argue that the benefits of "patent trolls" may outweigh the negatives; however, the literature is not clear on an answer to that question. The literature does point to certain factors which indicate when a patent holder may be abusing the system and behaving as a "troll." This paper provides a review and analysis of some important patent enforcement literature. Second, there is a substantial amount of literature concerning the patenting and licensing by universities and other nonprofits since passage of the Bayh-Dole Act in 1980. The Bayh-Dole Act allows universities and other nonprofits to patent government funded invention. The literature points to issues that may arise concerning university patent related activity, including some efforts by universities to lobby to protect their interests. This paper provides a review and analysis of some of that literature. Finally, this paper analyzes data from multiple sources at the confluence of those two issues, asking whether universities and other nonprofits are behaving similarly to so-called "patent trolls." Our research finds that in some instances universities and nonprofits may share some characteristics similar to "patent trolls." However, while we believe that casting a particular narrative over the data is relatively dangerous, there is cause for concern in the future. There are several factors that may make it more likely that universities and nonprofits will engage in additional litigation in the future, including perhaps abusive litigation practices resembling so-called "patent trolls." Indeed, several factors may place increased pressure on universities and nonprofits to find ways to monetize their patents. For example, the U.S. government appears to desire to cut research funding to universities, and universities will be searching for additional revenue streams. Moreover, most technology transfer offices fail to generate enough revenue to sustain themselves and will likely push for increased patenting, licensing, and even litigating to fund their operations. And, universities appear to be changing their tenure policies to encourage commercialization activities. As universities and their technology transfer offices search for funding, they may believe that commercialization and patent enforcement is the answer. We conclude that university and nonprofit litigation should be carefully monitored in the future, including patent litigation by academic and research institutions based outside the United States. [ABSTRACT FROM AUTHOR]

The article discusess whether lawsuits filed by non-practicing entities (NPEs) are efficient in the U.S. Topics discussed icnlude laws governing patents in the country; patent eligibility of the innovations; and an account of Patent Clause of the U.S. Constitution. It also mentions about licensing or litigating patents rights of the modern non-practicing entity.

This article empirically studies current claims that patent trolls, also known as patent assertion entities (PAEs) or non‐practicing entities (NPEs), behave badly in litigation by bringing frivolous patent infringement suits and seeking nuisance fee settlements. The study explores these claims by examining the relationship between the type of patentee‐plaintiffs and litigation outcomes (e.g., settlement, grant of summary judgment, trial, and procedural dispositions), while taking into account, among other factors, the technology of the patents being asserted and the identity of the lawyers and judges. The study finds significant heterogeneity among different patent holder entity types. Individual inventors, failed operating companies, patent holding companies, and large patent aggregators each have distinct litigation strategies largely consistent with their economic posture and incentives. These PAEs appear to litigate differently from each other and from operating companies. Accordingly, to the extent any patent policy reform targets specific patent plaintiff types, such reforms should go beyond the practicing entity versus non‐practicing entity distinction and understand how the proposed legislation would impact more granular and meaningful categories of patent owners. [ABSTRACT FROM AUTHOR]

The patent system is designed to promote innovation and supply a blueprint for innovative minds to improve upon, but the behavior of some patent owners is contrary to these principles. Non-practicing entities obtain patent rights, and rather than produce the product claimed in the patent, they assert their exclusionary rights broadly and aggressively against businesses producing similar products in order to induce settlement or licensing payments. These assertions account for a significant percentage of infringement claims and threaten a potentially innocent business with expensive litigation. The actions of these entities have a substantial effect on the patent system and have been the motivation behind reform and recent Supreme Court decisions. Each of the three branches of government has significant influence over the patent system, and each has the potential to promote change to reduce the impact of non-practicing entities on the United States patent system and on the United States economy. [ABSTRACT FROM AUTHOR]

Patent trolls, the epitome of greed, thoughtlessness, and unethical behavior, are impacting the survival, growth, and development of printing and related companies. The printing industry in the United States has been in a state of decline during the past 20 years (from approximately 55,000 companies to fewer than 30,000 today). Traditionally a low profit industry, printing companies and their suppliers are trying to find ways of increasing products and services focusing on digital technologies and related applications in order to increase profits and to save jobs. Patent trolls are inhibiting such growth and causing companies to consider closing, downsizing, and laying off employees because they cannot afford to absorb the huge fees being demanded by the trolls while also maintaining or growing business. The trolls are equivalent to extortionists with no sense of business morals and ethics or of the nation's push to grow companies, produce jobs, and keep, or bring back, as much business as possible to the United States. The hypothesis of this study is companies faced with the threat of patent troll litigation should not settle by paying license fees, but should partner in pooling resources to pursue invalidation of the patents in question. Such challenges are often won, and between 35% and 85% of patents being invalidated has been reported. The research methods used in this study include a review of the related literature, a case study of three patents of questionable validity claimed by two patent troll plaintiffs to be infringed upon by printing industry companies, and a survey of present defendants and those who were already sued and opted to settle out of fear and intimidation. This study concludes printing and related companies sued by patent trolls should not settle by paying the fees requested and should not enter into a single company litigation that can cost more than a settlement. Giving in to patent troll license fees or other demands will exacerbate the problem and encourage additional intimidating and threatening lawsuits in an attempt to extort funds from companies doing honest and legal business, working hard to survive and grow, and provide employment opportunities for skilled staff members. A solution is bringing together all of the companies named in a suit that has been filed by patent trolls and to work as a unit in bringing the matter of alleged patent infringements before the United States Patent and Trademark Office (USPTO) for invalidity hearings. [ABSTRACT FROM AUTHOR]

Though reasonable royalty damages are ubiquitous in patent litigation, they are only a hundred years old. But in that time they have become deeply misunderstood. This Article returns to the development and origins of reasonable royalties, exploring both why and how courts originally assessed them. It then turns a harsh eye toward all that we think we know about reasonable royalties. No current belief is safe from criticism, from easy targets such as the twenty-five percent "rule of thumb" to fundamental dogma such as the hypothetical negotiation. In short, this Article concludes that we are doing it wrong, and have been for some time. This Article is agnostic as to outcome; departure from traditional methods can and has led to both overcompensation and undercompensation. But it challenges those who support departure from historic norms--all while citing cases from the same period--to justify new rules, many of which fail any economic justification. [ABSTRACT FROM AUTHOR]