Empirical Evidence on the Behavior and Impact of Patent Trolls: A Survey

29 Pages Posted: 27 Dec 2015

See all articles by Lauren Cohen

Lauren Cohen

Harvard Business School; National Bureau of Economic Research (NBER)

Umit Gurun

University of Texas at Dallas

Scott Duke Kominers

Harvard University

Date Written: December 25, 2015


We survey the empirical literature on non-practicing entity (NPE) litigation behavior and its consequences. We document both aggregate trends and cross-sectional differences amongst various types of NPEs. Survey evidence illustrates a number of ways in which NPEs can potentially act opportunistically, and indicates at least some instances and consequences of observed NPE opportunism. Large-sample empirical work has recently begun corroborating and amplifying the findings from survey evidence. NPEs on average behave as "patent trolls." Indeed, NPEs hold and frequently litigate patents that are likely to be at least partially invalidated; moreover, NPEs, target cash irrespective of its relation to alleged infringement. Cash-targeting is neither the main driver of practicing entity (PE) intellectual property (IP) litigation, nor of non-IP litigation against publicly traded firms. The empirical evidence suggests, however, that not all NPEs exhibit trolling behavior -- the cash-targeting observed in the data is primarily the behavior of large patent aggregators, rather than small inventors. NPE patent trolling has a real negative impact on targeted firms, without any increase in innovation, technology transfer, or other counterbalancing benefits measured thus far.

Keywords: Patent trolls, NPEs, PAEs, Innovation, Patents

JEL Classification: D2, K1, O31

Suggested Citation

Cohen, Lauren and Gurun, Umit and Kominers, Scott Duke, Empirical Evidence on the Behavior and Impact of Patent Trolls: A Survey (December 25, 2015). Available at SSRN: https://ssrn.com/abstract=2708224 or http://dx.doi.org/10.2139/ssrn.2708224

Lauren Cohen

Harvard Business School ( email )

Rock Center 321
Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://www.people.hbs.edu/lcohen

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Umit Gurun

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

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

Scott Duke Kominers (Contact Author)

Harvard University ( email )

Rock Center
Harvard Business School
Boston, MA 02163
United States

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

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