Typology of the Patent Troll Business

Abstract:     
Patent trolls have many faces, since the media uses this expression in various ways. The patent troll phenomenon thus seems to be an ambiguous term that is discussed in several directions. This paper reveals that a patent troll as such has no distinct shape or appearance. Our analysis redeems a troll classification solely from firms’ market position, such as being non-practicing, and shows that a patent troll business can only be defined by the respective practice to enforce IPR. Using 10 case studies, of which five are treated in detail, the analysis reveals a distinct typology of IPR enforcement mechanisms and suggests a framework to assess the troll business. This paper is furthermore able to identify the nature of troll behavior to be: a) a best practice to enforce IP rights and b) a strategy that may create costs for affected industries. The differentiated troll analysis further reveals negative but also positive effects of the troll business on incentives to innovate.

Number of Pages in PDF File: 28

Keywords: Patent Trolls, Litigation, IPR Enforcement

JEL Classification: L10, L14, L15

working papers series