GERMANY
NPES IN EUROPE
Daniel Papst Papst Licensing
While Non-Practising Entities (NPEs), also known as Patent Assertion Entities (PAEs), have existed in the US for decades, they are a relatively new phenomenon in Europe. T ere are several reasons for this, not the least of which is the nature of European courts and a diff erent, less confrontational, business culture. While not as litigation-averse as the Japanese, Europeans have been somewhat late to the game when it comes to patent monetisation. However, there are indications that some European NPEs, while keeping a lower profi le, have been quite successful not only in Europe but also in the US and Asia.
In order to determine why NPEs appeared on the IP scene some basic facts have to be laid out. Myriad single inventors, small innovative companies, universities, and large corporations are engaged in research and development activities resulting in valid patents based on their own inventiveness. While single inventors, small companies, and universities mostly do not have access to the resources needed for bringing a product to market (experienced personnel, business know-how, time and capital), large corporations also sometimes choose not to manufacture and/or sell products or off er the services claimed in their patents. T ey sometimes choose to abandon a fi eld of technology and discontinue competing with products in the market or are purchased by another corporation having created a valuable portfolio of patents. Operating companies sometimes buy patents from third parties for defensive or counter-assertion reasons.
In the age of globalisation it has become extremely diffi cult for an individual to take legal steps available against the unauthorised use of his or her innovation. Even if the infringement is inadvertent, it still amounts to a misappropriation. Once a patented invention has established itself on the world market its illegal use quickly becomes common. While the infringer of a patent enjoys benefi ts from the illegal use of a new invention, the inventor is leſt empty-handed—that is, if he or she has not actively asserted his or her rights. In most instances, this is the case.
Given the nature of global production and worldwide trading, it is virtually impossible for the patent holder even to identify the party infringing the
68 World Intellectual Property Review e-Digest 2013
patent. Many businesses simply do not have the capital, time and know-how to enforce their rights internationally, let alone locally. If they nevertheless attempt to do so, there is a high risk that, aſt er a lengthy, distracting and expensive dispute, frequently with well-capitalised global players, they will have to resign themselves to giving up.
In addition, complex questions are posed by global markets, such as who are the infringing manufacturers in question, where and what do they produce and sell, and which patents are aff ected in particular countries? Finally, where and to whom are the infringed patents best licensed or enforced?
Patent infringements must be actively pursued to ensure that a patent holder can successfully reap the benefi ts of his, her or its patent rights and to keep innovation at the leading edge. Otherwise, why bother to innovate if infringers can readily misappropriate an invention without penalty? T e objective of sharing the fruits of a monetisation programme with the original holder of the patent is a motivation for most NPEs pursuing patent infringements. Granting licences has signifi cant advantages over pursuing an injunction once a technology has been successfully launched in the market. It then oſt en makes more sense in economic terms to participate in the success of an operating company than to have a monopoly situation imposed through the legal system.
Forum shopping: US v Europe
Because of diff erent legal systems in the US and Europe, today NPEs must choose where to enforce their rights. Just seven years ago most people trying to enforce a patent family (US, European Patent) would have said it was obvious to pursue enforcement activities in the US. It was the single biggest consumer market covered by one patent and the legal remedies in case of success (automatic injunction, chance for triple damages) outweighed the signifi cant litigation costs (which could be fi ve to 10 times more than at a European court) and the rather lengthy proceedings. T e situation in the US has, however, changed.
www.worldipreview.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119