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Jay P. Kesan

This chapter reviews studies of non-practicing entities (NPEs) (aka “patent trolls”) and their effect on the United States patent system. The information presented is not intended to pass judgment or persuade readers that NPEs are definitively beneficial or detrimental to the patent system, but rather seeks to inspire readers to assess the issue of NPEs from a more informed and detailed perspective. There are varying opinions and interpretations regarding NPEs, their behavior, and the effects of their behavior. Current empirical studies offer mixed evidence and conclusions regarding the effect of NPEs on the patent system. After reading this chapter, a researcher will be capable of determining substantial differences in the behavior and characteristics amongst the various types of NPEs. This would further help the researcher to differentiate which kinds of NPEs’ behavior are detrimental and which are favorable to the patent system.

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Jay P. Kesan and Andres A. Gallo

Intellectual property (IP) law regimes in the United States are designed as trade-offs between protection for creators (inventors, authors, and the like), and the interests of the consuming public. Reform of the patent system does not ascribe to a general idea of optimality or system efficiency, but must address and respond to a complex interplay of economic interests. We characterize the interplay between interested groups, not only with respect to patent law, but also for trademark law, copyright law, and trade secret law. We link stakeholder preferences and economic power to the lobbying power of different economic groups in Congress. This analysis offers a rich assessment of the chances of success, and the ways in which our IP intellectual systems transform and evolve with respect to changing technologies and the economic interests of different groups involved. We provide an overview of the political actors and legal institutions that participate in the creation of IP policy and describe the types of entities that are most interested in driving IP policy.