The anatomy of a troll? Patent licensing business models in the light of patent reassignment data

Aija Leiponen and Henry Delcamp

Research Policy, 2019, vol. 48, issue 1, 298-311

Abstract: We examine patent licensing business models of non-practicing entities that generate revenue by selling, licensing, or litigating patents. They may also pursue R&D activities, invent new technologies, or provide services to inventors or product companies. We describe their business models and patent market behavior and then compare their litigation strategies against product companies using a matched sample of highly comparable patents. The main differences among patent licensing firms stem from their technological capabilities, patent portfolio sizes, and external relationships. We find that licensing firms with technological capabilities often pursue litigation until decision and engage in forum shopping. In contrast, litigation incidence, parties involved, and outcomes are primarily determined by patent characteristics, not entity types. Licensing business models drive the acquisition of certain types of patents that influence the outcomes of the patent system. We argue that patent policy should strengthen mechanisms to discover invention quality rather than focus on the amount of litigation or types of entities.

Keywords: Non-practicing entities; Patents; Licensing; Litigation; Business models (search for similar items in EconPapers)
JEL-codes: D23 L22 L24 O34 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:48:y:2019:i:1:p:298-311

DOI: 10.1016/j.respol.2018.08.019

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