Invalidity Assertion Entities and Inter Partes Review: Rent Seeking as a Tool to Discourage Patent Trolls

Abstract

This Article analyzes how a new entrant to the patent landscape — the Invalidity Assertion Entity (IAE) — may discourage the much-maligned patent troll business model. IAEs are rent-seekers who demand consideration from patent owners in exchange for not attempting to invalidate their patents through an administrative action before the U.S. Patent and Trademark Office.

Self-interested IAEs will target patents and patent holders with attributes that maximize the likelihood the IAE will secure a lucrative settlement. Patent trolls exhibit these characteristics and will therefore be disproportionately targeted by IAEs. This practice raises costs and lowers income for patent trolls, which discourages future troll activity. IAEs thus — by pursuing their own profit-driven agendas — further the long-time policy goal of reducing patent troll lawsuits. This conclusion is diametrically opposed to the negative portrayals of IAEs in the media and recent legislative proposals to terminate the nascent business model.