That we cannot agree on the definition of a “patent troll” should give pause to efforts to regulate them


Joff Wild in International Asset Management magazine again cautions legislators in the U.S. and elsewhere to tread lightly when it comes to regulating what are often derogatorily referred to as patent trolls. This time the suggestion is that if we can’t even agree on terminology, there is a great deal of danger is applying regulation or even special scrutiny.

Wild frames the question facilely: What is a troll … or an NPE … or a PAE … or, perhaps more importantly, who gets to decide?

Santa Clara University Law School professor Colleen Chien distinguishes between Non-Practicing Entities and Patent Assertion entities (a term Chien claims for herself) by suggesting PAEs eliminate start-ups, which, presumably by definition, are not yet “practicing.”

PatentFreedom, a database used by a source for many studies on the effects of patent trolls, makes no such distinction. They use NPE, and they list companies they label as NPEs. As Wilde points out, Tessera is listed in all of its glory … but Chien would not refer to Tessera as a PAE, nor an NPE, nor a troll. So, which is it? If you were to ask Business Insider, it is one of technology’s most “fearsome” trolls.

The key is this: As we have discussed often in IP Value Wire, the component of value that exists in patents because they can be held and enforced by third parties is negatively affected by the relentless attack on “patent trolls,” from the lay press to legislative actions, to executive orders and, more recently, to an FTC 6(b) study. This component exists in all technology patents, not just those owned by the third parties, the NPEs. That we cannot even agree on definitions should be an alert that all should just take a breath.


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