In recent years, there has been much discussion in the business and legal communities about Non-Practicing Entities ("NPEs"), a.k.a. patent trolls, and the ills and costs they can often impose on companies large and small. It is said that NPEs sue companies alleging infringement of dubious patents, and then extort nuisance value (or higher) settlements, effectively imposing a tax on companies as they grow and are repeatedly targeted by NPEs. Companies settle even if they determine they don't infringe or that the patent is invalid because the NPEs' "ask" is too small to justify the litigation costs necessary to defeat the claim on the merits.
While the costs of NPE litigation are undoubtedly real, over the past decade changes in the patent law landscape have given defendants significant advantages over NPEs, even if it might not seem that way at times to those facing (yet another) NPE suit. As a result, defendants already have significant leverage to oppose and defeat NPE litigation and even to bend the incentives for bringing such cases further away from NPEs.
To read the full text of the article written by Duane Morris attorney Daniel T. McCloskey, please visit the Venture Capital Post website.
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