Non-practicing entities (NPEs) can be a headache to others with patents or who are seeking to get a patent. In fact, it’s been estimated that nearly three-fourths of all patent litigation involves NPEs.
An NPE is a party (either a business, organization or individual) that doesn’t use the technology, product, process or other thing for which they’ve obtained a patent. There’s more than one type of NPE. Let’s look at a few of the most common types of NPEs.
Entities doing research and development
Universities and other research facilities may develop or invent something, but they may not have the resources to develop it or be the right place to develop it. Nonetheless, they don’t want it stolen or misused, so they patent it. However, they’ll make the patent available to others in the interest of innovation.
Defensive and offensive patent aggregators
A defensive patent aggregator (DPA) is more likely to buy up patents similar to their own and then license them to others who will use them to develop the invention that’s been patented. This allows them to prevent unwanted competition to themselves and others.
Offensive patent aggregators (OPAs) are also parties that acquire patents. However, their goal is typically to monetize their patents by licensing them and threatening litigation of others.
Patent assertion entities (PAEs)
These are more likely to be considered “patent trolls” than those listed above. They’re widely defined as any patent holder that gets over half of its gross revenue from “asserting” its patents.
What to do if you receive notice of an infringement claim
Sometimes NPEs send out multiple patent infringement claims without researching them. It can be distressing to receive a notice of infringement, but they’re not always valid. Your business may have done everything right.
Before you contact the NPE or whomever is alleging infringement, it’s wise to get experienced legal guidance. This is not something you want to try to deal with on your own. Having a legal professional involved can also help discourage NPEs from pursuing invalid claims in the future.