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→Patent Trolls
==Patent Trolls==
Patent Trolls are an innovation bogeymen. Numerous research articles and legislation have been focused on ways to curb troll activity, making patent trolls one of the most publicly denounced issues in the patent system. Experts dispute terms for such corporations, labeling them as either Patent Assertion Entities (PAEs) or Non-Practicing Entities (NPEs). PAEs are defined by the FTC as companies that earn revenue by purchasing patents and accusing companies using those patented technologies of infringement.[https://www.ftc.gov/policy/studies/patent-assertion-entities-pae-study] NPEs are firms that rely on Patent Licensing activities for revenue.
[http://www.unifiedpatents.com/news/2016/5/30/2015-patent-dispute-report] Patent litigation involving NPEs in 2015 accounted for approximately 67% of cases reviewed by District Courtsin 2015. The high-tech sector is highly vulnerable to NPE lawsuits as 88% of high-tech patent litigation in 2015 was related to NPEs.<ref name="unified" /> Patent Trolls generate revenue through suing or threatening to sue businesses that infringe on patents. Typically, the damages asked for by Patent Trolls are far beyond the market value of the patent in order to scare small businesses in the initial demand letter, when pressing them to pay the fee to license the patent.
The Judiciary Committee in the House of Representatives have raised concerns regarding the effect of Patent Trolls on small business, startups, and non-tech companies given their lack of resources to defend themselves. As reported by the American Intellectual Property Law Association (AIPILA), the average cost of patent litigation is $650,000 regardless of company size. Approximately 55% of patent lawsuits filed by patent trolls are against businesses earning less than $10 million. The Judiciary Committee also reports that 40% of Small businesses targeted by patent trolls suffer from significant business setbacks requiring changes in strategy, shut-downs, a decrease in valuation or slows in growth. <ref name="patenttrollsbob" />
