By now, most directors and executives have heard of patent lawsuits being filed by non-practicing entities (NPEs)—more commonly known as “patent trolls.” These are companies that own patents but do not use those patents to produce products or provide services. Instead, these entities are in business solely to collect licensing fees or legal settlements from the patents they own. They pursue these outcomes through litigation or the threat of litigation, against businesses whose products or services allegedly infringe on the patents.
Although the concept of patent trolls may be familiar, few members of the C-suite recognize just how large and costly a problem these businesses have become. In 2012 alone, the cost of NPE-generated litigation was nearly $11 billion, according to a recent study conducted by RPX, in collaboration with the Coalition for Patent Fairness. More than 2,400 unique companies faced at least one NPE assertion of patent infringement last year, and 270 companies fought three or more NPE lawsuits. Clearly, patent risk has become a serious strategic and operational risk.
Nevertheless, most companies continue to treat patents and patent litigation purely as the province of the legal department. They are relying on legal tactics to solve what has become a market problem. For risk managers at all operating companies that sell or use technology products or services, the time is ripe for a radical shift in thinking. It's time to insist that patents become a more integral part of the company's overall risk-mitigation planning.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.