PATENT TROLLS’ THREAT TO SMALL AND MEDIUM-SIZE ENTERPRISES

Laurie A. Babin
Allison M. Jarrell
University of Louisiana Monroe

ABSTRACT

This study examines the threat of “patent trolls” to businesses, particularly small and
medium-size enterprises (SMEs), and offers suggestions on how to handle this threat. Patent trolls
are Non-Practicing Entities (NPEs) whose business models are based on litigation, not protecting
and fostering innovation. Studies have shown deleterious effects of this rampant nuisance
litigation, effectively reducing innovation and costing businesses millions of dollars responding to
this threat. However, legislative and judicial reforms are having impact, and fighting this threat
in the legal arena is becoming more effective.

Keywords: Patent trolls, patent assertion entities, PAEs, small and medium-sized enterprises