Discussion on NPE Institution

NPE, or Non Practicing Entity, non-patent implementer, does not innovate itself, but profits by purchasing or obtaining intellectual property rights authorized to own innovative technologies, and then finding patent infringers through the intellectual property rights they own, in order to sign patent licensing agreements or win lawsuits. Therefore, NPE is better known as "patent rogue" in addition to translating into "patent licensing company" and "patent marketing company".

According to statistics, more than 60% of all patent infringement cases initiated in the United States are initiated by NPE enterprises, and the direct losses caused by such lawsuits to the defendant exceed 30 billion US dollars. These NPE companies initiated lawsuits not because they wanted to create products through patents and occupy a certain market share, so as to achieve the purpose of profit, but because they wanted to "extract" patent royalties from other companies through litigation. And some start-ups, because of their lack of accumulation in the field of intellectual property, have become targets of NPE institutions. Data show that at least 20% of enterprises lacking financial support in the United States have been sued for patent infringement. Because the cost of litigation in the United States may be much higher than the amount of compensation, many companies choose to settle the matter, and most patent litigation battles are not heard in public, but settled through confidentiality agreements at the prosecution stage. This also further promotes the development of NPE institutions in the United States.

Of course, the NPE enterprise itself is a complex collection, and there are some internal divisions. Some NPE companies are offensive organizations focusing on patent trading and licensing. These companies generally adopt more radical patent strategies and frequently launch patent infringement lawsuits. Some NPE institutions hold a large number of patents, which are defensive institutions mainly by providing patent protection to customers. There are also some NPE institutions that are specialized patent operating institutions advocated by the government, whose main purpose is to stimulate the vitality of patents, let the existing patents not sleep, but play the real role of patents, such NPE institutions are not for profit as the main purpose.

No matter what type of NPE institution, the commonality is that the subject with the patent right does not implement the patented technology itself, but executes the patent right. Patent enforcement means that the patentee puts the patented technology into practice, manufactures the corresponding patented product or implements the corresponding patented method, while patent enforcement claims a right (patent exclusive right) and seeks to obtain a higher return while claiming the right. Since a patent right is a right granted by law, the enforcement of a patent right and the act of claiming a patent right with the expectation of return are permitted or even encouraged by law and should not be criticized. However, in the actual operation, many NPE institutions that engage in patent speculation have been born. The purpose of their efforts to obtain and claim patent rights is not to find ways to promote the implementation of patented technology, but to find ways to find enterprises that are implementing patented technology as the target of litigation. These targets are entities, and once the targets are found, these patent-speculating NPE institutions often force these entities to apply for patent licenses or pay high infringement fees by threatening lawsuits or lawsuits. While these NPE institutions have obtained considerable high returns, the accused companies and even the corresponding industries have suffered a heavy blow, which is completely detrimental to the development of the entire economic market and increases the cost of enterprise operation.

In the face of this kind of company that initiates patent infringement litigation, even if we subjectively think that it is a "patent hooligan", we can't wait to die, but need to take more active measures. Because the actions of these companies are also legal under the current legal system. Market economy is essentially a competitive economy, and there is no right or wrong. In the face of theseNPEWhat institutions and enterprises need to do is to learn to use the rules of intellectual property rights, actively accumulate in the field of intellectual property rights, so that they can advance, attack and retreat, and use the rules of intellectual property rights freely, so as to win the market competition.