For years, high-tech companies have amassed patents in order to deter patent litigation. Recently, a secondary market for patents has flourished, making it more likely that patents that would otherwise sit on the shelf will end up in the courtroom. This Article explores the current patent ecosystem, which includes both “arms race” and “marketplace” paradigms, in depth. I distinguish “patent-assertion entities,” entities that use patents primarily to obtain license fees rather than to support the development or transfer of technology, from other types of non-practicing entities. I contrast the patent arms race, whose goal is to provide entities with the freedom to operate, with the marketplace, through which entities have leveraged their freedom to litigate. I detail the participation of product companies as well as non-practicing companies and their intermediaries in the marketplace, and trace the diverse“pathways” traveled by patents from a diversity of sources including failed startups and product companies like Micron, to entities like Round Rock and Intellectual Ventures.
From Arms Race to Marketplace: The Complex Patent Ecosystem and Its Implications for the Patent System
Available at: http://digitalcommons.law.scu.edu/facpubs/69