New insights about NPEs

4/2017 Kirja-arvio 11.12.2017
Kelli Larson: The Exploitation and Enforcement of Patents by Non-Practicing Entities – Practices, Developments, and Future Challenges. Publications of the Hanken School of Economics, No 315 (2017).

In her doctoral dissertation, Kelli Larson researched the patent landscape and the practices employed therein by Non-practicing Entities (“NPEs”), and how they have developed over the last fifteen years. Larson’s research concentrates in three major patent jurisdictions: mainly U.S.A., as the NPE activity has mainly been concentrated there, but also Europe, and China. As the major changes in patent law and litigation has not only come from the usual sources, such as judiciary and legislators and administrative agencies, but also from actors operating within the patent landscape, the dissertation concentrates on researching NPEs business models and practices which revolve around exploitation and enforcement of patents to generate revenue.

NPEs have been highly discussed, criticized, and labelled as the “most significant problem facing the patent system today,” and the issues relating to NPEs have been debated in academia as well as on political stages. The explosion on excessive patent licensing fees and unwarranted litigation have been largely blamed on NPEs, suggesting NPEs are burdening industry operators and taking away from innovation. However, empirical studies supporting this are lacking and the negative view of NPEs has been accelerated by the term “patent troll,” capturing the public’s as well as policymakers’ attention, and further, resulting in critics question the entire patent system.

Larson’s dissertation aims to fill the gap in empirical studies relating to NPEs and discusses these issues bringing new insight by exploring and examining the practices of NPEs as well as the related legal environment in U.S.A, China, and Europe. As part of the dissertation, Larson has published three articles: 1) An Inside View to Non-practicing Entities’ Business Models: A Case Study, 2) Legal Implications of the European and Unitary Patent Systems for Non-practicing Entity Patent Enforcement in Europe, and 3) The Emergence of Non-practicing Entities in China.

Larson’s dissertation contributes to the academic discussion on NPEs practices and provides a more objective view around the NPE phenomena. As the dissertation points, the negative view on NPEs has largely come from the term “patent troll.” Larson’s case study presents six different types of NPE business models, providing a more neutral view on NPEs as part of the patent ecosystem, and suggests that NPEs may even be necessary in order to have a well-functioning patent system for all. Further, the dissertation examines the patent landscape for NPEs in Europe and China, as these jurisdictions may well be fertile grounds for NPE practices in the near future. The dissertation is a good read for anyone interested in understanding the various forms of NPEs activities.

Katri Lahtinen

M.Sc., doctoral student
University of Helsinki

Kelli Larson’s doctoral thesis “The Exploitation and Enforcement of Patents by Non-Practicing Entities – Practices, Developments, and Future Challenges” available online on DHanken.