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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