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

40 Pages Posted: 3 Aug 2016 Last revised: 12 Mar 2019

See all articles by W. Michael Schuster

W. Michael Schuster

University of Georgia - C. Herman and Mary Virginia Terry College of Business

Date Written: August 2, 2016

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.

Suggested Citation

Schuster, W. Michael, Invalidity Assertion Entities and Inter Partes Review: Rent Seeking as a Tool to Discourage Patent Trolls (August 2, 2016). 51 Wake Forest Law Review 1163 (2016). Available at SSRN: https://ssrn.com/abstract=2817450

W. Michael Schuster (Contact Author)

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Brooks Hall
Athens, GA 30602-6254
United States

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