NPE in today’s Patent

economy Alexander Alduncin M.A. & Paola Buitron J.D.

What is aPatent Troll?

The term “patent troll” is usually reserved for those who acquire patents from inventors or

companies, and then sue operating companies for patent infringement.

Continental Paper Bag Co. v. Eastern Paper Bag Co.

Supreme Court, 1908. Established the principle that patent holders have no obligation to use

their patent.

S.1137Protecting American Talent and Entrepreneurship Act of 2015 

Customer Stay

Large Loophole allows many manufactures to qualify as customer if they buy/import

components 

Customer Stay Provision

Allows a Court to stay a motion against a

retailer or end user that is accused of infringing

a patent or patents pending resolution against

the Manufacture.

Why notProduct Liability?

Product Liability refers to the obligations or duties of manufactures, other middleman, or retailers to

consumers, purchasers, users, and even bystanders when a product is found to be defective.

Under common law, Warranty Action is a theory under which a plaintiff could bring a suit for personal

injury or property damage caused by a defective product

Decline in patent suit filings

NPE cases concentrated in certain district courts as 5 out of 94 district courts account for

42%

of all identified NPE decisions from 1995 to 2014 (p. 16)

Data

• UGA Patent Litigation Datafile (Henry et al. 2013)

• All cases where District Court (DC) ruled invalid patent, valid but no infringe, or valid & infringe. No summary decisions, dismissals, etc

• Removed observations with no listed dates, missing data

• Divided into 2 subsets: 1929-2006 & 1991-2006

• Also incorporate Lex Machina & PWC summary reports on patent litigation, 2013-2015

Premise #1Cases Decided Over Time

Premise #2Repeat Litigators

MLogit Regression Results

Delaware District Court

Future Steps

• Identify other important variables?

• Updated data for new trends- Sag (2014) dataset

• Incorporate premise 3 via regression if possible, or summary statistics otherwise

• Look at thrown out cases