Unpacking Patent Assertion Entities (PAEs)

55 Pages Posted: 7 Nov 2013 Last revised: 19 Dec 2014

Christopher Anthony Cotropia

University of Richmond School of Law

Jay P. Kesan

University of Illinois College of Law

David L. Schwartz

Northwestern University - Pritzker School of Law

Date Written: November 30, 2014

Abstract

There is tremendous interest in a certain type of patent litigant — the often-called non-practicing entity ("NPE"), patent assertion entity ("PAE"), patent monetization entity ("PME"), or simply patent troll. These NPEs are the subject of a recent GAO report, a possible FTC investigation, pending legislation before Congress, and even comments from the President of the United States. All of this commentary and activity centers on whether NPE participation in patent litigation, and the patent system in general, is detrimental or beneficial to society. But the fundamental barrier to understanding the current debate is the lack of granular and transparent data on NPE litigation behavior.

Accordingly, we personally hand-coded all patent holder litigants from calendar years 2010 and 2012, and we are releasing this data to the public. In our coding, we drill down and finely classify the nature of the litigants beyond the simple NPE or non-NPE definitions. Releasing this data to the public that unpacks the definition of NPE can provide better illumination to policy makers, researchers, and others interested in the patent litigation system.

The data reveals a much lower percentage of litigation brought by patent holding companies than other studies, finding no explosion in NPE litigation between 2010 and 2012. Instead, we find that most differences between the years — an increase in the number of patent holding companies and individual inventor suits — is likely explained by a change in the joinder rules adopted in 2011 as part of the America Invents Act.

Keywords: patents, patent litigation, non-practicing entity, NPE, patent assertion entity, PAE, patent monetization entity, PME, patent troll, American Invents Act, joinder, patent holding company, empirical

Suggested Citation

Cotropia, Christopher Anthony and Kesan, Jay P. and Schwartz, David L., Unpacking Patent Assertion Entities (PAEs) (November 30, 2014). 99 Minnesota Law Review 649 (2014); Illinois Program in Law, Behavior and Social Science Paper No. LBSS 14-20; Illinois Public Law Research Paper No. 14-17; Chicago-Kent College of Law Research Paper No. 2013-49. Available at SSRN: https://ssrn.com/abstract=2346381 or http://dx.doi.org/10.2139/ssrn.2346381

Christopher Anthony Cotropia (Contact Author)

University of Richmond School of Law ( email )

28 Westhampton Way
Richmond, VA 23173
United States

Jay P. Kesan

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
217-333-7887 (Phone)
217-244-1478 (Fax)

HOME PAGE: http://www.jaykesan.com

David L. Schwartz

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

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