Clark D. Asay
85 Geo. Wash. L. Rev. 645
Over the last decade, much of the patent law literature has focused on the
problem of “patent trolls,” or patent owners who don’t make products, but sue
others that do. The basic complaint against these types of entities is that they
impose a tax on innovation without providing offsetting societal benefits. Furthermore,
their patent assertions have been on the rise, with a significant percentage
of patent suits now attributable to them. In short, the troll
phenomenon suggests a problem of excessive patent assertions.
But despite the importance of the troll phenomenon, the fact remains that
most patents are never asserted, or are asserted less than they could be. Under-assertion
of patents thus appears to be more prevalent than over-assertion.
Yet, beyond noting a set of generic economic considerations that may lead to
this outcome, the literature fails to provide systematic, industry-specific assessments
of why patent owners choose to forego asserting their rights in so many
cases. And the generic nature of these assessments is particularly problematic
given that patents play significantly different roles from one industry to the
next, as scholars have noted for some time.
This Article addresses these issues by providing an industry-specific, informal
model for theorizing why patent owners forego asserting their rights in
so many cases (and why they may not in others). It briefly applies this model
to four industries: software, pharmaceuticals, biotechnology, and semiconductors.
The Article then explores some potential implications of this industry-specific
model. In particular, this Article suggests that high barriers to patent
assertion in an industry may, ironically, result in increased patent trolling in
the industry. Hence, this Article provides guidance to policymakers by helping
explain the rise of patent assertions in some industries, such as software, as
well as helping to identify other industries, such as biotechnology, that may be
increasingly at risk of patent trolling.