Non-practicing entities in Europe: an empirical analysis of patent acquisitions at the European Patent Office

Valerio Sterzi, Cecilia Maronero, Gianluca Orsatti and Andrea Vezzulli
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Cecilia Maronero: BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Gianluca Orsatti: UNITO - Università degli studi di Torino = University of Turin
Andrea Vezzulli: Uninsubria - Universitá degli Studi dell’Insubria = University of Insubria [Varese]

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Abstract: This paper delves into the proliferation of non-practicing entities (NPEs), a hot topic in academia and public policy, especially in the United States. The common belief is that Europe is less exposed to NPEs due to a robust patent system, higher enforcement costs, and smaller damage awards. Yet, using a new database of NPE patent applications at the European Patent Office (EPO), the study uncovers that NPEs activity in Europe is arising: they own nearly 20,000 EPO patents, primarily in Electrical Engineering. Moreover, we contribute the literature investigating the heterogeneity of the NPE business model and its relationship with the characteristics and use of the patents they target. Our econometric analysis provides threefold original evidence. First, NPEs with higher propensity for litigation (i.e., "Litigation" NPEs) acquire patents with higher infringement risk but similar technological quality than practicing entities. Second, patent aggregators (i.e., "Portfolio" NPEs) and technology companies (i.e., "Technology" NPEs) acquire higher-quality patents compared to those acquired by practicing entities. Third, patent acquisitions by "Litigation" NPEs and "Portfolio" NPEs reduce the subsequent use of protected technologies.

Date: 2024-03-21
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Published in Industrial and Corporate Change, 2024, 33 (5), pp.1271-1297. ⟨10.1093/icc/dtae010⟩

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Related works:
Journal Article: Non-practicing entities in Europe: an empirical analysis of patent acquisitions at the European Patent Office (2024)
Working Paper: Non-Practicing Entities in Europe: an Empirical Analysis of Patent Acquisitions at the European Patent Office (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04532253

DOI: 10.1093/icc/dtae010

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