Are patent assertion entities a threat to Europe?

Publication details

Nikolic, Igor (2019). Are patent assertion entities a threat to Europe? 14(6) Journal of Intellectual Property Law & Practice 477  

Abstract

Patent assertion entities (PAEs) are often said to engage in opportunistic patent litigation and impose excessive licensing costs to manufacturing companies. A recent report suggested that PAEs are on a rise in Europe and expressed concerns about the negative impact of PAE litigation on Europe’s innovativeness. This article provides a different perspective.

Most PAEs are in the legitimate business of patent licensing. Only some PAEs could be said to be abusive. Opportunistic litigation is not exclusive to PAEs and practicing companies have as much or even more incentives to engage in opportunistic litigation against competitors.

The European system already has proper safeguards in place to prevent any litigation abuses, including experienced judges, lower costs of litigation, appropriate damages awards, fee-shifting rules. These safeguards, along with the generally higher quality of European patents, disincentivize speculative patent litigation. This is unlikely to change with the Unified Patent Court. The evidence suggests that Europe’s patent and litigation system is functioning well, with judges having the appropriate tools to address any abuses.