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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]

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This Article draws on a newly constructed multilayered relational dataset of patent infringement cases to assess hypotheses about different types of patent asserters and what happens in appeals of those cases. We situate this Article within the ongoing debates around companies that acquire patents but do not themselves practice the claimed technologies, particularly patent assertion entities (PAEs). We find that for some aspects of appeals, such as whether there was an appeal in a patent infringement case, cases brought by PAEs look similar on appeal to cases brought by product companies. But we also observe some substantial differences among litigant types--in particular, whether cases filed by PAEs are appealed more often and who is filing the appeals in those cases. We also observe that, regardless of the patent asserter type, most appeals are filed by patent owners, not accused infringers. Furthermore, even accounting for this difference, accused infringers are more successful on appeal than patent asserters--again, regardless of the type of patent asserter. [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]

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.

Venture-backed startups play a crucial role in innovation and advancing our technology. However, the development of secondary markets for patents and the proliferation of patent assertion entities starting in the early twenty-first century has made the patent ecosystem a difficult environment for startups to navigate. Startups face challenges that their more established counterparts do not. First, startups must rely heavily on external sources of funding and, as a result, many decide to file for patents early in their lifecycle to signal their value to potential investors. Second, patent assertion entities threaten startups with patent infringement suits at a disproportionately high rate, which disrupts startups' productivity and diverts their limited resources. This Note explores the "vicious patent cycle." The cycle begins when startups file patents to signal worth. Then, when 90% of these startups fail, they leave behind patents that grow the "patent thicket" as well as opportunities for patent assertion entities to stifle innovation. Together, these negative externalities exacerbate the challenge of building a new company. Unfortunately, the United States patent system is not well suited to put an end to the cycle. Thus, this Note introduces a solution for startups: the small business commercialization patent. The small business commercialization patent is a modified form of the commercialization patent introduced by Ted Sichelman but is tailored to meet the unique needs of venture-backed startups. [ABSTRACT FROM AUTHOR]

The article focuses on the debate over the role of non-practicing entities (NPEs and prior work on patent enforcement by NPEs in the U.S. Topics discussed include patent enforcement and innovation; prevention of patent infringement; and a survey asking intellectual property licensing lawyers at companies about their experiences with patent enforcement and the effects of patent licensing demands on subsequent innovation.

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]

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]

Patentees who are successful in litigation are entitled to no less than a "reasonable royalty" for the infringing use of the patent. Currently, reasonable royalties are assessed by the fact-finder using the cumbersome, difficult-to-apply fifteen- factor Georgia Pacific test. The Georgia Pacific test has been widely and roundly criticized, and there is general agreement that it too often hinders patent law's central goal: promoting technological innovation. To improve the reasonable royalty analysis, this article proposes adding innovation-centric factors to the Georgia Pacific test, including the total amount spent on research and development (R & D) and commercialization of the invention, taking into account opportunity costs and project-specific risk. Additionally, the article suggests emphasizing a slightly modified version of one existing innovation-centric, Georgia Pacific factor: the technological benefits offered by the invention when compared to alternative approaches. Like the "objective" factors used to make determinations of whether a patent is obvious, these innovation factors will help fact-finders to make more accurate and more consistent reasonable royalty determinations while more ably advancing patent law's goal of spurring innovation. [ABSTRACT FROM AUTHOR]

The article focuses on efficient allocation of patent damages liability within the supply chain and deterioration of patent notice and the related rise of inadvertent patent infringement and patent assertions by non-practicing entities. It mentions patent litigation and settlement bargaining rather than ex ante licensing and avoidance of infringement suits. It also mentions insurance agreements allow parties to shift control of settlement and defense in patent litigation.

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]

An introduction is presented in which editor discusses various articles within the issue on topics including standard essential patents, patent infringement and litigation of nonpracticing entities (NPEs) in Europe.

We model 'patent privateering'-whereby producing firms sell patents to Patent Assertion Entities (PAEs), which then license them under the threat of litigation-in a bargaining game. PAEs can negotiate higher licensing fees than producing firms because they cannot be countersued for infringement. Privateering produces two countervailing effects: it increases the offensive value of patents, whereas it decreases their defensive value and lowers the aggregate surplus of producing firms. Embedding the bargaining game into a Research and Development (R&D) contest for multiple complementary technologies, we find that privateering may increase R&D investments, even as it induces more litigation threats and reduces industry profits. [ABSTRACT FROM AUTHOR]

An ongoing debate in patent law involves the role "non-practicing entities," sometimes called "patent trolls," serve in the patent system. Some argue they serve as valuable market intermediaries, while others contend they are a drain on innovation and an impediment to a well-functioning patent system. This Article adds to the data available in this debate by conducting an event study that analyzes the market reaction to patent litigation filed by large "mass aggregator" non-practicing entities against large publicly traded companies. This study advances the literature by attempting to reproduce the results of previous event studies done in this area with newer market data and by subjecting the event study results to more rigorous statistical analysis. In contrast to a previous event study, the Authors found that the market reacted little, if at all, to the patent litigation filed by large non-practicing entities. [ABSTRACT FROM AUTHOR]

Over the last decade, much of the patent law literature has focused on the problem of "patent trolls," or patent owners who don't make products, but sue others that do. The basic complaint against these types of entities is that they impose a tax on innovation without providing offsetting societal benefits. Furthermore, their patent assertions have been on the rise, with a significant percentage of patent suits now attributable to them. In short, the troll phenomenon suggests a problem of excessive patent assertions. But despite the importance of the troll phenomenon, the fact remains that most patents are never asserted, or are asserted less than they could be. Underassertion of patents thus appears to be more prevalent than over-assertion. Yet, beyond noting a set of generic economic considerations that may lead to this outcome, the literature fails to provide systematic, industry-specific assessments of why patent owners choose to forego asserting their rights in so many cases. And the generic nature of these assessments is particularly problematic given that patents play significantly different roles from one industry to the next, as scholars have noted for some time. This Article addresses these issues by providing an industry-specific, informal model for theorizing why patent owners forego asserting their rights in so many cases (and why they may not in others). It briefly applies this model to four industries: software, pharmaceuticals, biotechnology, and semiconductors. The Article then explores some potential implications of this industryspecific model. In particular, this Article suggests that high barriers to patent assertion in an industry may, ironically, result in increased patent trolling in the industry. Hence, this Article provides guidance to policymakers by helping explain the rise of patent assertions in some industries, such as software, as well as helping to identify other industries, such as biotechnology, that may be increasingly at risk of patent trolling. [ABSTRACT FROM AUTHOR]

With the growing importance of intellectual property in the global economy, "patent infringement" has become a dirty phrase for patentees and defendants alike. For plaintiffs, it raises thoughts of the theft of one's just deserts. Yet defendants may think of nuisance-value suits and artificial impediments to the free flow of information. Neither side is happy because the American patent system adopts a blunderbuss approach to granting and protecting inventions. We have a one-size-fits-all solution regulated by an administrative agency, the U.S. Patent and Trademark Office, incapable (perhaps intentionally) of reliably screening out low-quality patent applications. The result has been a deluge of patents that have been granted when they should not have been--i.e., patents that remain unlitigated, impose high costs, and chill follow-on innovation. But because all patents are treated alike, good patents and bad patents are equal under the law; the patent right is always of equal "strength". In this Comment, I argue that patent infringement is something to be embraced, not avoided. Much as the legal academy and practitioners have adopted the counterintuitive idea of the efficient breach of contracts, I note that there is such a thing as the efficient infringement of patents; we should be encouraging infringement in certain circumstances to address to the vast private and social costs in today's patenting system. In this Comment, I analyze the economic and philosophical underpinnings of patent rights, and also make comparisons to trademark law and water law--another area of law that assigns rights under conditions of scarcity. Through this analysis, I demonstrate that sometimes incentivizing patent infringement by varying the strength of the patent right is preferable to the status quo. There is no reason for us to have a one-size-fits-all patent right when granted patents are often of low quality and there is room to fit the strength of the right to the underlying value of the patent. Simply put, I show that a "beneficial use" standard for patents, one that identifies whether the patent owner is exploiting the granted patent right in a societally beneficial manner, is more efficient and makes for better policy than our current system. [ABSTRACT FROM AUTHOR]

The article discuses economics of patient trolling in the light of court case Apple Inc. v. Samsung Electronics Co., which deals with the design of smart phones and tablet computers. In this case the Tokyo District Court ruled that Samsung's Galaxy smart phones and tablets did not violate an Apple patent on technology that synchronizes music and videos between devices and servers. It also mentions that the three-judge panel in Japan also awarded legal costs to be reimbursed to Samsung.

The Supreme Court's 2006 decision in eBay v. MercExchange is widely regarded as one of the most important patent law rulings of the past decade. Historically, patent holders who won on the merits in litigation nearly always obtained a permanent injunction against infringers. In eBay, the Court unanimously rejected the "general rule" that a prevailing patentee is entitled to an injunction, instead holding that lower courts must apply a four-factor test before granting such relief. Ten years later, however, significant questions remain regarding how this four-factor test is being applied, as there has been little rigorous empirical examination of eBay's actual impact in patent litigation. This Article helps fill this gap in the literature by reporting the results of an original empirical study of contested permanent injunction decisions in district courts for a 7.5-year period following eBay. It finds that eBay has effectively created a bifurcated regime for patent remedies, as operating companies who compete against an infringer still obtain permanent injunctions in the vast majority of cases that are successfully litigated to judgment. In contrast, non-competitors and other non-practicing entities are generally denied injunctive relief. These findings are robust even after controlling for the field of patented technology and the particular court that decided the injunction request. This Article also finds that permanent injunction rates vary significantly based on patented technology and forum. Finally, this Article considers some implications of these findings for both participants in the patent system and policy makers. [ABSTRACT FROM AUTHOR]

Proponents of legislative patent reform argue that the current patent system perversely impedes true innovation in the name of protecting a vast web of patented inventions, the majority of which are never even commercialized for the benefit of the public. Opponents of such legislation argue that comprehensive, prospective patent reform legislation would harm the incentive to innovate more than it would curb the vexatious practices of non-practicing entities. But while the "Innovation Act" wallows in Congress, there is a common law tool to protect innovation from the patent thicket lying right under our noses: the reverse doctrine of equivalents. Properly applied, this judge-made doctrine can be used to excuse infringement on a case-by-case basis if the court determines that the accused product is substantially superior to the patented invention, despite proof of literal infringement. Unfortunately, the reverse doctrine is disfavored by the Court of Appeals for the Federal Circuit and therefore rarely applied. It was not always so. This Article is the first comprehensive study of published opinions applying the reverse doctrine of equivalents to excuse infringement between 1898, when the Supreme Court established the doctrine, and the 1982 creation of the Federal Circuit. This "lost precedent" reveals a flexible doctrine that takes into account the technological and commercial superiority of the accused product to any embodiment of the patented invention made by the patent-holder. An invigorated reverse doctrine of equivalents could therefore serve to protect true innovations from uncommercialized patents on a case-by-case basis, without the potential harm to the innovation incentive that prospective patent legislation might cause. [ABSTRACT FROM AUTHOR]

To obtain a substantial patent damage award a patentee need not commercialize the patented invention; the patentee need only show that its patent was infringed. This surely incentivizes patenting but it dis-incentivizes innovation. Why commercialize yourself? The law allows you to wait for others to take the risks, and then you emerge later to lay claim to "in no event less than a reasonable" fraction of other people's successes. It is rational to be a patent troll rather than an innovator. This troll-enabling interpretation of patent law's reasonable royalty provision, however, is wrong as a matter of patent policy. Surprisingly, it is also wrong as a matter of patent history. The courts created the basis for reasonable royalties in the nineteenth century, thereby marking a significant change to patent damages. But this precedent was nowhere near as sweeping as today's interpretation would suggest. Up to the mid-1800s, the existing routes to patent damages were strict, available only to patentees who had already commercialized their patented invention. Budding innovators who were starting to commercialize but who could not yet prove an established royalty or lost profits were left out. Courts developed reasonable royalties for them. Those cases never extended reasonable royalties to those who simply sat on their patents waiting to extract payment from others. Starting in the 1970s, however, reasonable royalties came unmoored from that historical foundation. Infringement alone, without any evidence of commercialization, now creates a presumption of compensable harm. Today's view of reasonable royalties is unsupported by patent history and sits in tension--if not outright conflict--with binding Supreme Court cases. Properly understood, some efforts to commercialize or some evidence of copying are still necessary for significant reasonable royalties. As a result, nominal damages are still reasonable to compensate for infringement of an unpracticed patent when asserted against independent inventors. [ABSTRACT FROM AUTHOR]

According to § 284 of the Patent Act, damages for patent infringement are supposed to be compensatory. The statute only allows for recovery of "damages adequate to compensate for the infringement." Even though it qualifies that such damages must be "in no event less than a reasonable royalty," this language cannot be read to avoid the fundamental requirement that, as compensatory damages, any recovery must stem from actual harm suffered by the patent owner. Absent proof of actual harm, only nominal damages should be recoverable. Yet patentees who suffer no actual harm are regularly obtaining considerable amounts of money from alleged infringers as purported reasonable royalty damages. This state of affairs reveals a need to correct the course that damages law has taken. The most prominent group of patent owners receiving windfalls instead of compensatory damages are patent assertion entities ("PAEs"), also known as "patent trolls." While there are other situations where patentees are not actually harmed by instances of infringement, PAEs' business models and damages theories best highlight how existing damages law is being misread and exploited to support widespread overcompensation for infringement. [ABSTRACT FROM AUTHOR]

The article focuses on conflicts in patent law arising from the prevalence of patent trolls in the U.S. Topics discussed include patent infringement defined by the U.S Patent and Trademark Office (USPTO), House Bill 117 passed in the Utah 2014 General Session for patent infringement and a brief history of the U.S patent law. It mentions the U.S Supreme Court case Octane Fitness, LLC v. Icon Health & Fitness regarding patent lawsuit fee-shifting.

The article discusses the anti-patent trolling law passed by Vermont for the regulation of patent trolls in May 2013. Topics discussed include the U.S Leahy-Smith America Invents Act and patent reform that encouraged the development of patent rights and discouraged patent-infringement claims, the attempts made by the anti-patent trolling law to prevent patent holders from extortion by PAEs, and a brief history of the development of U.S. patent law.

The article focuses on patent bullying problem in the U.S citing reference to a case study of infringement suits brought by patent bullies that introduce costly patent infringement actions against smaller companies. Topics discussed include patent troll issues, suits filed by incumbent telecommunications carriers such as Sprint, Verizon, and AT&T against computer telephony service provider Vonage Holdings Corp., and case Honeywell International v. ITT Industries that addressed patents-in-suit.

One of the greatest challenges facing patent holders is the enforcement of their rights against foreign (non-US) infringers. Jurisdictional rules can prevent patent holders from filing patent infringement suits where they have the greatest likelihood of success in enforcement, such as where the infringer is located, has its seat, or holds its assets. Instead, patent holders must file lawsuits in the country where the infringed patent was issued. But filing a patent lawsuit in a US court against a non-US infringer may be subject to various difficulties associated with the fact that US substantive patent law (particularly as regards its territorial scope) and conflict of laws rules are not always compatible and interoperable with the conflict of laws rules of other countries. Such insufficient compatibility and interoperability can lead to US judgments not being enforceable outside the United States. In the Hague Conference's Judgments Project, which the Conference relaunched in 2012, the United States has an opportunity to negotiate internationally-uniform conflict of laws rules to improve cross-border litigation, including cross-border patent litigation. This Article provides data on cross-border patent litigation that can be used to show the extent of the cross-border patent litigation problem and assist in assessing the appropriate degree of US involvement in the Judgments Project. The Article updates the author's earlier research on cross-border aspects of patent litigation, contributes to the rapidly growing body of empirical literature on patent litigation (including the literature on the "patent troll" phenomenon), and enriches the literature on foreign litigants in patent disputes and on transnational litigation in general (both of which suffer from a dearth of statistical data). [ABSTRACT FROM AUTHOR]

There has been much debate about the economic harms caused by patent infringement lawsuits filed by patent holders who do not make or sell products covered by their own patents--entities pejoratively referred to as "patent trolls." This debate has thus far been largely theoretical or based on broad industry-wide data. The purpose of this Article is to present a focused empirical report that has previously been lacking--detailed information regarding the inventors themselves, the patent assertion entities (PAEs) that represent them, and the stories behind their patents. The research for this Article centers on two instructive case studies: (1) MercExchange, L.L.C., the prominent PAE whose seminal patent infringement action against eBay continued to the Supreme Court in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006); and (2) Capital Security Systems, Inc., a lesser-known PAE that has sued some of the largest banks in the world on its patented electronic check processing technology. This Article explores the stories behind the inventors, the patented inventions, and the entities asserting the patents in order to develop a more complete contextualized picture of PAEs and their economic impact. Based on this more complete picture, the Article then assesses whether these patent holders warrant the "patent troll" moniker, lurking under the bridge of innovation waiting to harass and extort innovators attempting to pass, or whether they instead resemble the great American vision of a Horatio Alger novel protagonist, laboring to build that bridge of innovation brick-by-brick and eventually reaping a reward for their hard effort. The Article concludes that, while additional studies are needed, the two PAEs studied herein fall squarely into the latter honest laborer category. [ABSTRACT FROM AUTHOR]

The article discusses assertion of patent through empirical analysis of actual infringement awards. Topics include the cases involving patent assertion entities (PAEs), particular assumptions regarding patent assertion, and the patent troll debate. Also mentioned some reform proposals that have been introduced.

The article discusses the possibility that American antitrust laws can be applied to limit the effect that patent assertion (non-practicing) entities (PAEs) have on innovation and competition in the U.S. Patent royalties and licensing fees are mentioned, along with the impacts of PAEs on research and development. The U.S. Clayton Act and the nation's Federal Trade Commission (FTC) Act are examined, along with intellectual property-related profits and patent infringement claims in America.

Patent litigation has become more frequent, more uncertain, and more expensive. Much of this can be traced to the rise of patent trolls asserting vague and uncertain software patents. Trolls have been derided as bringing frivolous and vexatious suits against productive companies, sapping the very same innovativeness that the patent system is supposed to encourage. Instead, companies are subject to nuisance-value suits as an ordinary course of business; for less established companies, such suits can threaten their very existence. Often, because of uncertain rules about claim construction and the granting of very broad patents, the accused infringer has no notice of any potential infringing behavior until the suit is brought or a demand letter is sent. This lack of notice--or "notice failure" as it is called--is a serious problem that disturbs the careful balance the patent system tries to achieve. In exchange for a limited monopoly in the invention, the patentee must disclose to the public what was invented. But if the public is not given proper notice of the full scope of the invention, the quid pro quo is turned on its head, favoring the patentee at the expense of the public. This Note proposes strengthening the notice requirement of the patent system. In particular, damages should be limited to behavior occurring after actual notice is given to an accused infringer where a patent troll asserts a software patent. [ABSTRACT FROM AUTHOR]

It is widely argued that so-called “patent trolls” are corrupting the U.S. patent system and endangering technology innovation and commercialization at large. For example, a recent White House report argued that “trolls” hurt firms of all sizes and advocated for specific policies aimed at curtailing practices thought to be particularly harmful. Yet the existence and extent of any systematic effects of so-called “troll-like” behavior, and the implications of modern patent assertion practices by Non-Practicing Entities (“NPEs”), remains unclear. This article develops novel empirical evidence to inform the debate over NPEs on patent litigation. Specifically, we conduct a large-scale empirical analysis of more than 1,750 patent infringement cases decided by a judge or jury in U.S. district courts between 1995 and 2011. We focus on case outcomes, including findings of validity and infringement, and the distributions and values of resulting damage awards. We find some relatively small differences in terms of lower success rates and award values in cases where the patent holders are NPEs. Yet across the subset of cases in which damages are awarded to the patent holders, we find no significant differences in the distribution of awards between NPEs and practicing entities. Nonetheless, there are substantial differences in litigation behavior, success rates, and award values among types of NPEs (that is, universities, individuals, and Patent Assertion Entities (“PAEs”)). Moreover, we find evidence of certain NPEs engaging in strategic and rational patent acquisition, assertion, and settlement-licensing practices. We posit that these practices may reflect, or perhaps derive from, the economic separation of patent rights from their underlying technologies that is represented in NPE approaches to patent assertion. [ABSTRACT FROM AUTHOR]

With increasing frequency, so-called "patent trolls," patent owners that do not manufacture products embodying its patent (i.e., non-practicing entities or NPEs), are pursuing patent infringement before the United States International Trade Commission. Currently, the only impediment to a NPE to do so is the ITC's statutory domestic industry requirement under 19 U.S.C. § 1337(a)(3)(A)-(C). Currently, a successful NPE, which has already licensed its asserted patent, may be able to satisfy the domestic industry requirement through its licensee's domestic activities related to an embodying product or by its own domestic licensing activity. In order to protect American industry from the costs of NPE infringement suits before the ITC, Congress would need to amend § 1337(a)(3)(A)-(C) to add an explicit "manufacturing in the United States" requirement. [ABSTRACT FROM AUTHOR]

The article discusses the reciprocity of search in relation to American patent law as of January 2013, focusing on the legal duties and obligations of commercial product makers and patentees in terms of potential patent infringement claims. Other topics include patent trolls, breach of duty claims, and analyses of reciprocity of search in cases involving real property and copyright. A notice requirement in Section 287 of the U.S. Patent Act is also examined, along with declaratory judgments.

The article presents information on the highly litigious non practicing entity (NPE) plaintiffs and offers discussion on the various criticisms of and justifications for NPE. It informs that scholars believe in the growing number of patent plaintiffs who do not sell or produce product are immune to counter claim for patent infringement. The different types of NPEs include failed companies, universities and individuals and states that patent troll wait for an industry to develop and exact toll.

The article discusses an assertion which states that permanent injunction should be grated on providing proof of patent validity, copyright ownership or trademark infringement. It discusses the U.S. Supreme Court case eBay v. Merc-Exchange LLC, wherein it was held that injunction should not be automatically issued based on a finding of patent infringement. It presents information on Canadian laws which are similar to the U.S. laws regarding intellectual property infringement.

NPEs (NPEs) are firms that rarely or never practice their patents, and instead focus on earning licensing fees. NPEs may have patented inventions on their own or bought the patents from other inventors. NPEs have been the subject of much controversy over the past few years. Critics of these firms have labeled them "patent trolls" and claim that they use weak and vague patents to extract excessive licensing fees or to engage in frivolous infringement litigation against product manufacturers. NPEs and their supporters, on the other hand, claim that these firms enhance innovation and competition by providing capital to independent inventors and creating an efficient market for trade in technological information. This Note uses patent data from the U.S. Patent and Trademark Office (PTO) and infringement litigation information from Stanford Law School's Intellectual Property Litigation Clearinghouse (IPLC) to test some of the arguments made for and against NPEs and to determine whether these firms benefit or harm innovation. [ABSTRACT FROM AUTHOR]

Prior research found that the Chinese patent system is more pro-patentee than once believed. Patent owners performed much better in both infringement lawsuits and post-grant validity reviews in China than in many other countries, such as the United States and Germany. Also, after a finding of infringement, Chinese courts were quite lenient with regard to permanent injunctions. All these pro-patentee tendencies, together with the rapid growth of China's software industry, cast doubt on the prevalence of troll activities in China. This article analyzes 3435 patent infringement lawsuits decided by local people's courts in China in 2015 and 2016 and provides some valuable insights into two important questions: how often do patent trolls litigate in China, and do they adopt different litigation tactics from practicing entities? Based on empirical data, this article finds that, interestingly, both the number and the size of patent trolls in China are relatively small. Although nearly half (1534, or 44.7%) of all patent infringement lawsuits were initiated by non-practicing entities (NPEs), individual inventors, instead of professional businesses, accounted for an overwhelming majority of all NPE cases (1528, or 99.6%). Patent assertion entities (PAEs), by contrast, only initiated four out of 3435 cases (0.1%) in the two-year period under review. If only patents in the computer industry are taken into consideration, then PAEs initiated zero computer-related lawsuits. Nonetheless, this article does observe some trollish litigation tactics worthy of attention and further research. There were 47 repeat litigants – litigants who initiated 10 or more cases; some performed "commercial enforcement," asserting patents against multiple small retailers instead of against one large manufacturer; and patent owners, on average, waited for a rather long time before enforcing their patents in China. All these behaviors may introduce bias to the incentives to innovate and put pressure on the overall functioning of the Chinese patent system. [ABSTRACT FROM AUTHOR]

Defensive Patent Aggregators (DPA) are a new patent intermediary that aims to counter the threat of Patent Assertion Entities (PAEs) to technology practicing firms by preempting patents that can be utilized by PAEs. In this study, we investigate whether and to what extent DPAs are in competition with PAEs for patent aggregation. In our theoretical analysis, we develop a game theoretic model that illustrates the selection of patents for aggregation by DPAs and PAEs, and derive four testable hypotheses regarding differences between the DPAs and PAEs aggregated patents. The model shows that DPAs are unlikely to be in complete competition with PAEs for patent aggregation and there are systematic differences in the characteristics of patents acquired by PAEs and DPAs. Our empirical analysis using U.S. patents aggregated by large PAEs and DPAs from 2008 to 2014 presents corroborating evidence for our hypotheses. Our findings imply that DPAs' patent preemption business model alone may not be sufficient to mitigate the threat of PAEs for technology firms, and point to the important role of public policy intervention. We discuss implications for technology firms and policymakers who seek to establish state-run DPAs. • Examine whether DPAs are in a head-to-head competition with PAEs for patents aggregation. • Specify the differences in the characteristics of aggregated patents between DPAs and PAEs. • DPAs may not be enough to protect technology firms from the threat of PAEs. [ABSTRACT FROM AUTHOR]