Unpacking Patent Assertion Entities (PAEs)
Christopher Anthony Cotropia
University of Richmond School of Law
Jay P. Kesan
University of Illinois College of Law
David L. Schwartz
Northwestern Law School
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
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.
Number of Pages in PDF File: 55
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
Date posted: November 7, 2013 ; Last revised: December 19, 2014