In this
post, I will touch on what exactly a Non-Practicing Entity (NPE) is as well as
the arguments from both sides on their significance.
Also called
a patent troll, an NPE is simply an entity that holds patents with the intent
on pursuing licensing fees, or other monetary compensation, from other
corporations due to patent infringement.
Usually, these people or companies simply hold the rights to certain
patents and therefore to not produce or sell products. An example of an NPE that I will touch on in
my next blog post is called Smartflash LLC.
The name
troll carries with it a negative connotation, suggesting that the work these
NPEs do is somewhat malicious or detrimental to the patent industry. However, there are two sides to every
story. Starting off in a positive light,
NPEs are essential when it comes to protecting intellectual property. They give small innovators and entrepreneurs
a chance to protect their patent rights in a fight against a large
corporation. A single person may not
have the capital to fight a lengthy legal battle against a fortune 500 tech
company, but an NPE can hold their own in such a legal battle. By protecting the patents rights of its
owners, NPEs succeed in achieving the main goal of the patent system.
Opponents of
patent trolls cling to the argument that NPEs are simply out to fish for compensation
and licensing fees. Winning or losing
the court battles, though very important, is not the main reason for the tech
industry’s dislike of trolls. Many claim that by NPEs enforcing their
property rights are doing more harm than good.
By continually suing large, innovating companies, many are afraid to
innovate further for fear of being taken to court by a later troll. For this reason, the interaction of NPEs and
large tech companies are threatening the pursuit of innovation. Furthermore, this is the reason that
legislature restricting NPEs are coming in the near future.
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