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83 U. Cin. L. Rev. 747 (2014-2015)
From Non-Practicing Entities (NPES) to Non-Practiced Patents (NPPS): A Proposal for a Patent Working Requirement

handle is hein.journals/ucinlr83 and id is 761 raw text is: FROM NoN-PRACTICING ENTITIES (NPES) TO NON- PRACTICED PATENTS (NPPs): A PROPOSAL FOR A PATENT WORKING REQUIREMENT Maayan Perel* Injecting fresh oxygen into the strangled patent troll problem, professors Mark Lemley and Douglas Melamed advised us recently to change our focus from targeting specific entities that unduly burden technology users to addressing the underlying features of the patent system that account for trollish profits. Taking Lemley and Melamed's advice seriously, this proposal focuses on one specific feature of the patent system that it believes to constitute the heart and bones of the troll problem-the legitimacy of non-practiced patents (NPPs). Particularly, it suggests changing the paradigmatic understanding of the troll problem, into one that understands that the patents that are being exploited to impose litigation threats and extract settlements are the real problem, not those who assert them. Because such patents are not developed into actual products or services, their holders are immune to a counterclaim of patent infringement. For the same reason, the likelihood of entering into low-cost, cross-licensing agreements over such patents is almost impossible. NPPs-patents that are not developed promptly into sufficiently commercialized goods-are the essence of the patent troll problem. Pursuant to this refined conception of the troll problem, and borrowing from trademark law, this proposal contends that a patent working requirement, which requires all patent owners to promptly submit a proof of sufficient patent commercialization to the United States Patent and Trademark Office, excluding those having an acceptable excuse, may solve the patent troll problem. Under this model, the two fundamental features of NPPs that facilitate patent trolling could be no longer sustained. First, all patents will become suspected to a counterclaim of patent infringement. Second, low-cost, cross-licensing agreements will become essential to all patent exploitations. By substantially reducing the amount of NPPs, the proposed model is * S.J.D., University of Pennsylvania Law School; Associate, Foley-Shechter LLP; LL.M., Benjamin N. Cardozo School of Law; LL.B. in law and economics, University of Haifa, Israel. I am grateful to professor R. Polk Wagner of the University of Pennsylvania Law School for invaluable contributions and guidance. I further thank professor Gideon Parchomovsky of the University of Pennsylvania Law School for insightful comments and suggestions. I also thank Dr. Tal Zarsky and Dr. Orna Rabinovitch of the University of Haifa - Faculty of Law for excellent comments. Special thanks are also due to the participants of the 2014 spring Law and Technology Seminar at the University of Haifa - Faculty of law. The opinions addressed in this paper are solely those of the author.

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