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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]

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]

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]

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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]

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 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]

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.

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]

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]

For most of patent law's 200-plus year history, patent holders could sue only in the district inhabited by the defendant. In 1990, the United States Court of Appeals for the Federal Circuit decided that the scope of permissible venue extended to all districts with personal jurisdiction over the defendant. In recent years, patentees have flocked to certain districts, fueling the widespread perception that patentees, particularly those that do not practice their patents, called non-practicing entities ("NPEs"), are abusing fo rum. Responsive to these concerns, Congress and the courts have moved to reinstate a more restrictive rule, culminating in the Supreme Court's 2017 TC Heartland LLC v. Kraft Foods Group Brands LLC/decision to limit venue to locations of the defendant. Yet, incredibly, to date there has been no measure of the overall pervasiveness of forum shopping and whether TC Heartland or any other venue reform will change this phenomenon. We address this gap by estimating the differential impacts of reform on fding patterns. We find, based on an analysis of approximately 1500 patent and non-patent cases filed in 2015 that about 86% of patent cases--a striking share--were brought outside of the defendant's home district. This practice is not limited to nonpracticing entities, however; corporations, universities, and individuals all filed outside of defendant districts. Things would have been different if venue were reformed, but much depends on how reform is implemented. If the Supreme Court's decision to restrict venue to where the defendant resides or has an established place of business were already in effect, an estimated 58% of 2015 cases would have had to have been filed in a different venue. If the Congressional proposal to change venue to include home districts with research or manufacturing connections to the case had been in effect, about half the NPE cases in our sample would have needed to be refled in another district, but only 14% of the operating company cases would. Cases would have become less concentrated in a single district, with the top district, Delaware, capturing 20-24% of cases, but the top three districts, the District of Delaware, the Eastern District of Texas, and the Northern District of California, would still have the majority of cases. Regardless of the reform, we expect smaller defendants to get more from venue relief than larger defendants because of their relatively smaller footprints. Among NPEs, universities, individuals, and small companies should be impacted to a lesser extent than patent assertion entities ("PAEs"), considerably so if the VENUE Act were enacted. [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]

Non-practicing entities (NPEs), some of which are also labeled patent assertion entities or "patent trolls," play a disputed role in our modern patent system. These entities, which do not make and sell products or services that embody their patented technologies, file a large percentage of all patent lawsuits. The perceived patent "troll" problem has dominated the discussion of patent reform in recent years. The policy debate is complicated by disagreement over who counts as a "patent troll," and by debates over whether NPEs are inherently problematic or whether the real problem consists of entities (practicing or not) that assert weak patents. In this Article we present empirical results that provide insight into both questions. Drawing on a comprehensive data set we built of every patent lawsuit filed in 2008 and 2009 that resulted in a ruling on the merits, we find that the situation is rather more complicated than simply comparing operating companies to NPEs. While operating companies fare better in litigation than NPEs overall, breaking NPEs into different categories reveals more complexity. And once we remove certain pharmaceutical cases from the mix, no patent plaintiff fares very well. That is particularly true of software, computer, and electronics patents. [ABSTRACT FROM AUTHOR]

The article offers information on the Berkeley Center for Law & Technology Patent Damages Workshop held on March 3,2016 in Berkeley, California. Topics discussed include patent damages plays a central role in cases brought by non-practicing entities, Patent Act provides for the claimant the court shall award the claimant damages adequate to compensate for the infringement and improve the process of patent valuation methodology especially in the information and communications technology sectors.

The "monopoly " authorized by the Patent Act refers to the exclusionary power of individual patents. That is not the same thing as the acquisition of individual patent rights into portfolios that dominate a market, something that the Patent Act never justifies and that the antitrust laws rightfully prohibit. Most patent assignments are procompetitive and serve to promote the efficient commercialization of patented inventions. However, patent acquisitions may also be used to combine substitute patents from external patentees, giving the acquirer an unearned monopoly position in the relevant technology market. A producer requires only one of the substitutes, but by acquiring the combination it can impede product market rivals by limiting their access to important technological inputs. Similarly, a patent assertion entity (PAE) may acquire substitute patents to eliminate interlicensor competition, enabling it to charge supra-competitive license fees, much like a merger or cartel. For example, by acquiring two or more substitute patents that collectively dominate a market a PAE can effectively monopolize the technology for that market. Such anticompetitive practices are regularly condemned in conventional product contexts, but the courts have not yet applied the same antitrust logic to patent markets. And they passively encourage anticompetitive patent acquisitions by awarding large damages when such patents are infringed. We propose that infringement damages for an externally acquired patent be denied if the acquisition served materially to expand or perpetuate the plaintiff's dominant position in the relevant technology market. By weakening enforcement, this limits the patent holder's ability to use such acquisitions to anticompetitive ends. We do not suggest that a dominant patent holder should be prohibited from securing external patent rights in the relevant technolog)> market, but simply that its acquisition be limited to a nonexclusive license. This will permit the acquirer to practice the patent and keep its own technology up to date, but will not enable it to restrict third party access. This is as valuable to patent policy as it is to antitrust, for it will tend to increase innovation by discouraging systematic monopoly in technology markets. [ABSTRACT FROM AUTHOR]

The article discusses the American patent law system's Inter Partes Review (IPR) process in relation to the rent-seeking behavior of Invalidity Assertion Entities (IAEs) which are known to threaten to invalidate a patent if its owner refuses to pay a monetary sum. The similarities and differences between IAEs and patent trolls (nonpracticing entities) are addressed, along with the business strategies of IAEs, the U.S. Patent and Trademark Office, and U.S. federal and state laws.

United States patent law's view on the need for a physical embodiment of the invention, and the continued production and use of an embodiment, has varied over the last two centuries. In the early days, the requirement for ?physicalism? was high, with the inventor being required to actually reduce the invention to practice prior to patenting, and enforceability was tied to ?working? the claimed invention. By the early 1900s, these requirements of physicalism disappeared. This changing view on physicalism speaks volumes as to which major patent theory the law emphasizes, with physicalism supporting the incentive to invent theory and the shift away from this physicalism bringing the disclosure theory to the forefront. This interplay between physicalism and patent theory, particularly regarding post-issuance physicalism, not only explains the past, it also describes the current discourse regarding, and legal reaction to, non-practicing entities (?NPEs?). Decisions such as eBay v. MercExchange, denying exclusivity to NPEs, once again emphasize physicalism and are interrelated to the incentive to invent and, in turn, downplay the disclosure theory and question its current validity as a patent policy goal. [ABSTRACT FROM AUTHOR]

The article discusses several changes involving the U.S. patent law system as of 2016, and it mentions the concerns of American attorneys regarding the overprotection and underprotection of patents, the nation's Patent and Trademark Office, and nonpracticing entities (patent trolls). The legal aspects of patent eligibility, remedies, and an obviousness patent doctrine are examined, along with forum shopping and research involving patent lawsuits in America between 1980 and 2012.

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]

Patent trolls are generally seen as drains on the economy, as they make no marketable product and survive only by drawing funds away from other legitimate businesses. While the federal government has taken steps toward combating patent trolls, much of the legwork is being done at the state level. This Note argues that the states are the proper platform through which to combat patent trolls, as states are in the position to best balance legal assertions of patent rights with the protection of businesses from patent trolls on a local level. [ABSTRACT FROM AUTHOR]

The patent system is usually described in terms of opposites, like producers versus trolls or software versus pharma. But the reality is a far more complex set of layers, including enforcers, patentees, and technology. This study of 25 years of patent litigation by highly litigious non-practicing entities ("NPEs") and randomly selected plaintiffs explores each of these layers and shows ways that each interacts with the others, using patent validity as a primary exemplar. Data related to more than 1000 patent outcomes in more than 2000 cases leads to some surprising findings. For example, while the litigious NPEs enforced many patents from product companies and public companies, the patents enforced by random companies were more likely to come from larger and better-funded companies. Additionally, the data implies that patents obtained by individuals fared worse in litigation, regardless of who enforced them. Most surprisingly, once patentee and enforcer type is considered, software patents are no longer a statistically significant predictor of invalidation. The layering of the system shows that simple stories describing one layer at a time cannot answer the questions that face the patent system. The interconnections between the layers of the patent system point the way. [ABSTRACT FROM AUTHOR]

The article discuses the author's proposal regarding how U.S. antitrust law can be applied to address patent privateering against small businesses as of 2016, and it mentions various aspects of litigation involving non-practicing patent assertion entities (PAEs) in America. According to the article, patent privateering involves the harassment of rival companies in order to raise costs. A rebuttable presumption of antitrust liability recommendation is examined, along with U.S. patent rights.

The article argues that opening patent portfolios not only fosters innovation but also significantly decrease litigation and transaction costs for companies. It provides an overview of the U.S. patent system and examines the advantages and problems associated with the modern patent system and shows how an open source model presents a useful solution to the patent puzzle. It points out that the U.S. patent system stunts innovation and allows patent trolls to abuse the legal system.

Traditional justifications for patents are based on direct or indirect contribution to product creation. Non-practicing entities (NPEs) might provide such innovation, either directly, through working the patent or transfer of technology to others who do, or indirectly, when others copy. Available evidence suggests, however, that ex post licensing demands from NPEs do not normally involve these activities. Some have argued that patents are valuable without01/technology transfer because the ability to exclude may drive commercialization that would not otherwise occur. We demonstrate that even if commercialization theories sometimes justify patent protection, they cannot justify most NPE lawsuits or licensing demands. [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]

The America Invents Act (AIA) was widely hailed as a remedy to the excessive number of patents that the Patent & Trademark Office issued, and especially ones that would later turn out to be invalid. In its efforts to eradicate "patent trolls" and fend off other ills, however, the AIA introduced serious constitutional problems that this Article brings to the fore. We argue that the AIA's new "second-look" mechanisms in the form of Inter Partes Review (IPR) and Covered Business Method Review (CBMR) have greatly altered the scope of vested patent rights by modifying the boundaries of existing patents. The changes in the boundaries of the patent grant made it significantly more likely that the patent owner would see his patent invalidated. This new state of affairs has already reduced the value of some patents that were obtained before the AIA became effective, and further declines will likely follow. We show on the basis of constitutional takings jurisprudence that the loss of value that some patent owners have suffered as a result of the new procedures--even if their patents have not been specifically subjected to them--potentially compare with physical takings and definitely fall under the umbrella of regulatory takings. The way to remedy these failings is for the government either to change its procedures or provide just compensation to the patent owners that received patents from the PTO before the enactment of the AIA. [ABSTRACT FROM AUTHOR]

A court may award attorney fees to a prevailing party in a patent trial under exceptional circumstances. Since 2005, courts had applied a rigid formula to determine whether a case was exceptional. In the summer of 2014, the Supreme Court rejected this rigid test. Instead, the Court held that an exceptional case is "simply one that stands out from others. " Finding a case exceptional, the Court said, was at the discretion of the district court and only reviewable on appeal for an abuse of discretion. A year and a half later, one interesting question is: How do district courts now determine what cases are exceptional in the absence of a more formulaic approach ? The analysis of several cases decided soon after the Supreme Court's decision reveals that district courts primarily analyze a party's litigation position and litigation conduct to determine whether-- in its discretion-- to award attorney fees. To a lesser degree, district courts have also awarded attorney fees to deter infringement and unsavory litigation practices. However, the deterrence rationale has the potential to be problematic: its purpose is to deter litigation practices, but given the current legal climate it could be used to unfairly penalize litigants that might be classified as "patent trolls. " The existing literature on the award of attorney fees in patent cases sheds very little light on the problems district courts ' reliance on the deterrence rationale could present. This Essay addresses these problems and offers practical insights as to when courts should rely on the deterrence rationale to award attorney fees. The Essay points out that what makes a case exceptional should have little to do with the identity of the parties. In addition, this Essay prescribes that district courts should not take into account the business model of the parties to justify deterrence as a rationale for awarding attorney fees. [ABSTRACT FROM AUTHOR]

The article examines the liberalized fee-shifting framework for patent cases in the U.S. Topics discussed include laws aimed to prevent patent trolls in the country; remedial approach to abusive patent litigation; the costs of patent litigation; and the role that abusive patent litigants play in the liberalization of fee-shifting in patent cases.

The article presents an approach to curb abusive patent litigants. Topics discussed include problem of patent trolls and their history; ways in which U.S. courts has been addressing the issue of patent trolling; and ways in which patent troll behaviour, narrowing the novelty and nonobviousness analyses through the judiciary.

Patent litigation has multiplied sixfold since the 1980s, with the last few years seeing an unprecedented number of patent lawsuits. When an inventor receives a patent, the U.S. Constitution grants him a monopoly for a limited number of years to reward him for his investment of time and resources and to incentivize him to continue innovating, which ultimately benefits society. However, the emergence of a litigious character, deemed the "patent troll," has led to the patent system's hindrance of innovation, a result that is at odds with the primary goal of patent law. Patent trolls exploit weaknesses in the patent system in a number of manners: they assert overly broad patents to force companies into financial settlements because these companies cannot afford the cost of litigation; they deter innovative companies from investing in research and development through the threat of litigation; and they do not practice the patents they hold, thus contributing no innovation in the advancement of technology and immunizing themselves from countersuit. In addition, trolls exhibit anticompetitive behavior, a trend that has caught the eye of the Federal Trade Commission. This Note provides a survey of the modern patent landscape, addressing certain areas of the patent system that patent trolls are able to use to their advantage. This Note then advocates that the Federal Trade Commission play a more integral role in curbing anticompetitive troll behavior and proposes several methods of patent reform. [ABSTRACT FROM AUTHOR]

Imagine you invented a way to perform mathematical calculations all over the world simultaneously. Now, imagine that you cannot patent your invention because it was compared to, and found to contain, the same idea as an abacus. This scenario was the outcome of Alice Corp. v. CLS Bank International. In coming to its decision in Alice, the U.S. Supreme Court adopted a two-part test that it had previously utilized to analyze the patentability of laws of nature to determine whether the patent at issue met the subject matter patentability standards of § 101 of the Patent Act. Determining the claim contained an abstract idea, the Court then addressed whether the invention was a patentable application and found it was not because "generic" computer implementation did not add "significantly more" to the underlying idea. Since Alice, courts have invalidated a number of patents for failing to meet this criteria--arguably turning from the plain meaning of the Patent Act and congressional intent. Utilizing the Alice framework, courts have dismissed patent infringement claims in the pleading stages upon labeling them as abstract and citing reasoning as well as utilizing terminology that is more indicative of a § 102 or § 103 Patent Act analysis. While an argument can be made that proactively dismissing some claims in the pleading stages could reduce the prevalence of patent trolls and improve the efficiency of the patent process, this Note argues that the widespread proclivity of courts to invalidate patents under § 101 by utilizing language indicative of § 102 and § 103 analysis robs patent holders of the ability to have their claims analyzed under proper standards and injects subjective and uncertain criteria into the patent infringement analysis that could be avoided by implementing other analytical methods. As a remedy to the inclusion of § 102 and § 103 factors in the subject matter patentability analysis, this Note advocates that a substantial increase in speed or efficiency generated by an invention should be taken into account in determining if the invention adds "significantly more" to the idea. This would create a tangible bright-line test that would allow the claim to move forward and be analyzed under more suitable Patent Act sections. [ABSTRACT FROM AUTHOR]

The article examines the primary purpose of patent laws in the U.S. Topics discussed include the U.S. Supreme Court's decision in the case 'Alice Corp. v. CLS Bank International' in which the court held that the simple ideas are not patentable simply because they are done on a computer; impact of the decision on the non-practicing entities; and laws related to software and business method patents.

The article discusses patent trolls (nonpracticing entities) and a U.S. preemption legal doctrine in relation to several American state laws which are designed to provide patent protection, and it mentions American federal law, as well as the U.S. Constitution's First Amendment and Supremacy Clause. Petitioning immunity in patent law cases is examined, along with American statutes, law enforcement, and the equitable roots of good faith immunity.

The article reviews the development of the patent laws in the U.S. concerning defensive methods used to navigate webs of overlapping patent rights. Topics discussed include rise of non-practicing entities (NPEs), changes in substantive doctrines, trend towards increased monetization, evolution of defensive strategies, and laws defined by the U.S. United States Patent and Trademark Office regarding the issue.

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]

An introduction is presented in which the author discusses various reports within the issue on topics including American patent laws such as the U.S. Leahy-Smith America Invents Act, nonpracticing entities (patent trolls), and patent royalty-related damages in the U.S.

The article reports on the decision of the U.S. Supreme Court cases in two court cases including "Octane Fitness LLC v. ICON Health & Fitness Inc." and "Highmark, Inc. v. Allcare Health Management Systems, Inc." Topics discussed include impact of the decisions on patent litigation involving patent trolls, the patent troll litigations, and shortcomings of the patent troll business.

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]

Patents have become a serious business risk. They issue from the Patent and Trademark Office in record-breaking quantity and are aggressively enforced by patent trolls. But many patents are likely to be invalid; and even those which are valid are likely to be narrower than their owners claim. Firms investing in innovation would find it desirable to clear their respective fields of invalid or overbroad patents prior to making their investments, and there is great social value in reducing the number of such patents. But the path to determining the validity or scope of issued patents runs through the courts, and in recent years the Federal Circuit has developed special standing rules for patent challengers that allow access to the courts only when it appears that an infringement suit is temporally or legally proximate. In this Article, I criticize this "proximity" criterion on conceptual, doctrinal, and normative grounds and provide a comprehensive account of standing to challenge the scope and validity of patents. Conceptually, I argue that because patents are a form of regulation, their effects sweep more broadly than the Federal Circuit currently appreciates. When the risk of infringement liability deters business and investment activities, the affected parties can bring a "quiet title" action to obtain certainty about the validity or scope of adverse patents. I then argue as a doctrinal matter that there is no reason to treat patent challenges differently from other cases. Applying traditional principles of constitutional and prudential standing broadens the range of potential plaintiffs. Finally, I justify this result on normative grounds because the Federal Circuit's restrictive approach creates a misalignment between those who have incentives to challenge patents and those who have access to the courts. Allowing challenges by a broader range of plaintiffs will result in more socially valuable validity litigation. [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 how the U.S. constitution's First Amendment may offer a solution to the problem of patent quality in software and business methods in the U.S. Topics discussed include the U.S. Supreme Court decision in the case "Alice Corp. v. CLS Bank," First Amendment remedy to the patent troll problem, and enactment of the Patent Act.

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 discusses the statute enacted by the state of Vermont which aims to curbing bad faith patent assertions in the patent law. Topics discussed by the author include the historical overview of the growth of patent trolls in the U.S., how the statute considers the constitutional preemption of the Supremacy Clause of the United States Constitution, and the need for the federal legislature to either enact a federal law similar to Vermont or to adopt an amendment to existing legislation.