Patent Shopping

52 Pages Posted: 10 Mar 2020

See all articles by Janet Freilich

Janet Freilich

Fordham University School of Law

Date Written: February 15, 2020

Abstract

Over the past decade, scholars have identified many entities who use the patent system in ways that differ from the traditional model of patent use — entities such as patent assertion entities, patent aggregators, or owners of large patent portfolios. This Article presents a model that explains the behavior of some of the biggest and most controversial entities in the patent system. This Article argues that such entities are engaged in “patent shopping” where the plaintiff makes a strategic choice of patent in order to obtain the best facts and substance in a case and thereby maximize the chance of a favorable outcome. The patent shopping model draws by analogy on forum shopping, where plaintiffs make a strategic choice of forum in order to maximize the chance of a favorable outcome. The patent shopping model stands in contrast to the traditional model of patent use where a patentee owns a small number of patents closely related to a commercialized invention, which are drafted to encompass possible attempted work-arounds. Under the traditional model, patent acquisition comes first, infringement second. This Article proposes that, for patent shoppers, the chronology is flipped: infringement first, patent acquisition second. Instead of drafting patents to predict infringement, patent shoppers are able to react to infringement by selecting a patent that fits the infringing behavior. This is possible because most companies are constantly infringing on many different potential patents, infringement which has historically not been enforced. Patent shoppers have access to hundreds or thousands of patents, related to many different inventions, and can identify an instance of infringement that is a good target for enforcement and can then acquire the patent(s) of their choice. For instance, patent assertion entities may evaluate large numbers of patents that are available for sale and then select patents that can be most profitably enforced. Similarly, owners of large patent portfolios can shop in their own closet by selecting the best patents for enforcement from a wide array of options.

This Article presents the shopping model and then conducts a qualitative review of the financial statements of potential patent shoppers to provide empirical evidence that these entities pursue patent shopping as a business strategy. Patent shopping is a way to view some of the most important players in the patent system and adds a new analytic perspective to the broad literature on these entities. The concept of shopping for good claims is not unique to patent law; it also occurs in, for example, personal injury litigation and consumer debt suits. Thus, the framework proposed herein is broadly applicable to many areas of law.

Keywords: patents, intellectual property

Suggested Citation

Freilich, Janet, Patent Shopping (February 15, 2020). Available at SSRN: https://ssrn.com/abstract=3538751 or http://dx.doi.org/10.2139/ssrn.3538751

Janet Freilich (Contact Author)

Fordham University School of Law ( email )

140 West 62nd Street
New York, NY 10023
United States

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