The automotive industry has discovered something that the electronics industry has known for years: Nonpracticing entities also known as “NPEs” or “patent trolls” can inflict significant costs through the filing and prosecution of patent infringement lawsuits. Now more than ever, companies in the automotive industry find themselves named as defendants in NPE litigation, and thus need to be ready for the fight and prepared with the tools and knowledge that best help repel NPEs, avoid liability and save costs.
A High-Impact Problem
As the name suggests, NPEs are patent owners who do not practice their patents by marketing any tangible product. Instead, they exist solely to assert their patent rights against others to extract licensing fees and settlements. Commentators have estimated that NPE lawsuits were responsible for half a trillion dollars of lost wealth from 1990 through 2010, resulting in an average of more than $80 billion of lost wealth per year during the last four years alone, as James Bessen, et al., wrote in “The Private and Social Cost of Patent Trolls,” a paper written for the Boston University School of Law.
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