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{{Project|Has project output=Content,Guide|Has image= |Has title=The Truth Behind Patent Trolls Issue Brief|Has owner=|Has start date=|Has deadline=|Has keywords=|Has sponsor=McNair Center|Has notes=|Has project status=Tabled|Is dependent on=|Does subsume=The Truth About Patent Trolls}} This is the issue brief based off findings in [[The Truth Behind About Patent Trolls]] page.

Non-practicing entities own patents, but do not necessarily create products out of these patents. This behavior is pretty common. '''(Get statistics about number ; 95% of patents not are never used)''' commercially [http://www.wired.com/2015/01/fixing-broken-patent-system/]. Universities are examples of non-practicing entities. Faculty members may file for patents based on their work in a laboratory and receive a patent. Then, those faculty move on to a different project and do not use the patent they hold.

Patent trolls may also target a slew of companies that tangentially intersect the sphere of the patent. One famous example of a patent troll is MPHJ Technology Investment, which who claimed to have patents that cover any networked "scan-to-email" function. MPHJ sent out demand letters to more than 16,000 small businesses. Each , each letter demanded demanding license fees in the of at least $1000 rangeper worker.

*Show venn diagram showing the overlap of PAEson patenttrollsdata3.xlsx on sheet 1 if relationship between NPE, NPEsPAE, and Patent Trolls?PT is not clear

Patent assertion entities that do not engage in abusive litigation are often burdened by The current U.S. patent system restricts the association market for innovation with the term "patent trollhigh transaction costs and legal risks." [http://www.bnawired.com/challenges2015/01/fixing-of-defining-abroken-patent-trollsystem/] Proposed Most small and medium-sized businesses are unable to afford the costs associated with patent legislation in the 114th Congress fails to make a clear distinction between PAEs litigation and patent trollsare prevented from commercializing or licensing over 95 percent of current active patents. The House Innovation Act (H[http://www.Rwired. 9) and the Senate PATENT Act (S. 1137), two major bills proposing com/2015/01/fixing-broken-patent reform in the current Congress-system/] Therefore, do not differentiate between legitimate many smaller-sized businesses rely on patent holders assertion entities to protect their patents and defend against expensive litigation. Patent assertion entities aggregate and patent trolls manage patents and threaten have the expertise to make litigation even more costly and risky for all patent holderslegitimately protect patents from infringement. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf]

The current U.S. In illiquid markets where asets cannot be sold or exchanged easily, patent system restricts the market for innovation with high transaction costs and legal risks. [http://www.wired.com/2015/01/fixing-broken-assertion entities can help match patent-system/] Most small and medium-sized businesses are unable holders to afford the costs associated with patent litigation buyers and transfer ideas and are prevented technology from commercializing or licensing over 95 percent of current active patentsinventors to manufacturers effectively. [http://www.wired.com/2015/01/fixing-broken-patent-system/] Therefore, many smaller-sized businesses rely This allows inventors to focus on patent assertion entities to protect their patents innovation while benefiting from the knowledge and defend against expensive litigationconnections that intermediaries possess. Patent assertion entities aggregate and manage patents and have are able to incentivize innovation through the expertise to legitimately protect effective brokerage of patents from infringement. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf] They manage risks for small inventors and inform manufacturers or inventors of the usefulness of having another inventor's patent in their patent portfolio. [http://www.bna.com/challenges-of-defining-a-patent-troll/]

The patent market is illiquidAccording to the U.S. Census Bureau, which means that assets cannot be sold or exchanged easilysmall businesses with less than 20 employees made up 89. In illiquid markets, specialized intermediaries, like patent assertion entities, can help match patent holders to patent buyers and transfer ideas and technology from inventors to manufacturers effectively6 percent of employer firms in the United States in 2012. [httpshttp://wwwsbecouncil.whitehouse.govorg/sitesabout-us/default/files/docsfacts-and-data/patent_report.pdf] This allows inventors to focus on Small firms produce more patents per employee than large companies and help drive innovation while benefiting from in the knowledge and connections that intermediaries possessUnited States economy. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf] Patent assertion entities The patents they develop have a greater impact and are able to incentivize innovation through the effective brokerage often more technologically important than those of patentslarge firms. [httpshttp://www.whitehouseimamidejo.gov/sitessi/defaultresources/files/docsdoc/patent_reportanaliza%20patentov%20v%20msp%20usa.pdf] They manage risks The Small Business Administration reported that "although small firms account for small inventors and inform manufacturers or inventors only 8 percent of patents granted, they account for 24 percent of the usefulness of having another inventor's patent patents in their patent portfoliothe top 100 emerging clusters. " [http://www.bnasbecouncil.comorg/challengesabout-ofus/facts-defining-a-patentand-trolldata/] Because small businesses and emerging companies are not always able to protect their patents on their own and account for much of the innovation driving emerging industries today, they need patent assertion entities who have the power to protect their patents for them.

There's no doubt that patent trolls exist. eDekka, widely considered one of the top patent trolls, sued filed lawsuits against 101 companies for patent infringement in 2015, 55% of which are considered small businesses under SBA regulations. There are certainly many may be more companies that eDekka sent threatening demand letters to, companies that decided to settle instead of bringing the case to court. Compare this eDekka to The Regents of the University of CaliforniaIntellectual Ventures, which had only filed 17 6 patent lawsuits in the last 16 yearsall of 2015. It was ranked as Intellectual Ventures is considered by the number 1 "Worldwide University Granted Upublic to be a legitimate patent monetization firm [http://www.Sipnav. Patents" on com/blog/patent-assertion-entities-good-or-bad-for-innovation/]. It is clear that there is a report released in 2014 by the National Academy of Inventors distinct difference between patent assertion entities and the Intellectual Property Owners Associationpatent trolls. ('''would be better if we could find a 'good' PAE instead of this NPE''') As of December 2015, eDekka had sued over 200 companies for infringing upon the US Patent no. 6,266,674 "Random Access Information Retrieval Utilizing User-Defined Labels", a patent on a form of household remote controls. 168 of these cases were later thrown out by US District Judge Rodney Gilstrap, who wrote that the "strikingly similar lawsuits" demonstrate "an aggressive strategy that avoids testing its case on the merits and instead aims for early settlements falling at or below the cost of defense" [http://arstechnica.com/tech-policy/2015/12/in-a-first-east-texas-judge-hits-patent-troll-with-attorneys-fees/].

There are two problems with this. First, the increase in patent litigation cannot be attributed to an increase in patent trolls. Patent litigation is increasing, but only because of the uncertain nature of technological advancements and the application of patent claims to these new developments. Patent litigation surges are consistent with major shifts in technological developments. When patent filings and lawsuits are graphed together, both lines have an obviously positive slope, and generally move in tandem. '''(Show the graph)''' There has been an increase in lawsuits, but it is proportional to the increased filings. '''(Show the graph)''' Thus, patent trolls exist but their prevalence has been greatly exaggerated by the media.

 Legislation that enacts sweeping reform of the patent system will not help curb patent troll activity. This type of reform only weakens patent protection for legitimate patent holders and patent trolls alike and does not deter patent trolls from engaging in abusive or frivolous litigation. The [[Innovation Act]] and [[PATENT Act]] would exceed what is needed to reduce the activity done by a small number of patent trolls by raising the costs and risks for all legitimate patent holders to enforce their patent rights in court or defend themselves from larger companies. Any legislation that would alter the current patent system should target the specific actions used by patent trolls and should not propose broad reforms that change the procedure used to enforce patents. For example, legislation like the recently proposed [[STRONG Patents Act]] gives the FTC the power to determine that certain demand letters are in "bad faith" and penalize the companies that issue these letters, but also specifically protects mistakes that were made in good faith. Congress last passed comprehensive patent reform only five years ago, in 2011, and the unintended consequences from those changes are still appearing. [https://www.congress.gov/bill/114th-congress/senate-bill/632/text#toc-id645863c82106422dbabf0358ad52716d] Without carefully analyzing the potential effects of broad reform, Congress should not rush to combat the small amount of abusive litigation activity with sweeping changes that negatively affect everyone.  ==Comment/Notes== General notes:*have courts Statistics and facts should be drawn less from case studies*Take a look at the top 10 patent trolls identified by Unified Patents, quick look at whether they are patent trolls*Estimate of how many more patent trolls there are?*Read Jim Besson’s paper (Albert is writing a lit review on it)*Look at literature on trolls What is a Patent Troll section:*First statistical fact is a case study fact. “MPHJ sent demand letters to more than 16,000 small businesses, each letter demanding license fees of at least $1000 per worker”. Less case study ish, more consistent data Why PAEs are good for Innovation and Small Businesses:*“Most small and medium-sized businesses are unable to afford the costs associated with patent litigation and are prevented from commercializing or licensing over 95 percent of current active patents” is not from a reliable cited source sources that show legal fees for patent litigation is 20,000. get real article. what are the costs associated? mean revenue of small business is this, cost of prosecuting patent infringement lawsuit is estimated at this…, therefore… “Therefore, many smaller-sized businesses rely on patent assertion entities to protect their rulings patents and procedures (so defend against expensive litigation.” not true. many small businesses don’t own patents. “patent assertion entities can help match patent holders to patent buyers and transfer ideas and technology from inventors to manufacturers effectively.” not everyone goes true. they sue people who have infringed on the patent. patent auctions match people.  US census bureau fact. 90% of small businesses have under 20 employeesShow small businesses cannot afford this amount of money. SBA fact is wrong.  My Sectionsystematic number, number of demand letters by FTC, instead of case study.  “appears to Ebe, could be, might be” intellectual ventures legitimate patent monetization firm.DDescribe it, buys and develops own patented technologies. Texas)*more specific regulation Two problems with this. People x claim that targets the increase in patent owners acting in bad faithlitigation is …there is no evidence to support this. (check there is no evidence)  Do we need to empower the FTC?MPHJ – case study don’t have market for ideas but we’d like itpoisoning it with demand letter litigation [[Category:Patent]]