The Layered Patent System
48 Pages Posted: 21 Feb 2015 Last revised: 27 May 2016
Date Written: February 19, 2015
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 twenty-five years of patent litigation by highly litigious non-practicing entities and randomly selected plaintiffs explores each of these layers and shows ways that enforcement, patenting, and technology interact with each others.
Data related to more than one thousand patent outcomes in more than two thousand 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.
Note: Data files are available on request from the author for replication, testing, or other use.
Keywords: NPE, PAE, patent, troll, reform, invalidity
JEL Classification: O30, O31, O33, O34
Suggested Citation: Suggested Citation