Abstract

Patent trolls or non-practicing entities (“NPE”) have rapidly become a hot topic in U.S patent litigation over the recent years. The technology in-dustry has been deeply troubled by this new type of patent business model. The most well-known representative of NPEs is Acacia Research Coopera-tion (“Acacia”). Acacia acquires, licenses, and enforces patented technology rights as its main business, making its revenues through large numbers of patent licensing negotiations and patent litigations. This paper uses Acacia is as the main subject of research, applying the empirical approach in ana-lyzing the quality of Acacia’s patent portfolio and its patent litigation strate-gies. The study found that Acacia’s patent portfolio quality is superior to other NPEs, and often exceeding the quality of patent portfolios owned by operating companies. Acacia’s patent portfolio scope focuses mainly on the electronics industry, ranging from digital data processing, protocol, digital ra-dio, and digital communications. In addition to patents related to the elec-tronics industry, Acacia’s patent portfolio also expands to the areas of busi-ness and financial management. Analysis of Acacia’s litigation strategy find that Acacia uses its affiliates or subsidiaries to launch patent litigation against large companies as its major targets. Texas Eastern Federal District Court has long been favored by Acacia as the main choice of venue for litiga-tion or other venues that have ruled in favor of the patent holder. Acacia of-ten takes on multiple defendants in a single suit to increase its bargaining power for negotiations and cases usually end in settlement or withdrawal in about a year. Cases brought by NPEs before the International Trade Com-mission (“ITC”) have also increased in recent years, gradually rising since 2006. This paper also discusses the topic of whether NPEs satisfy the do-mestic industry requirement in the United States (“US”). How do Taiwan domestic manufacturers deal with patent infringement claims against NPEs? Once these domestic manufacturers are identified as infringers by NPEs they will usually take the initiative to file for summary judgment. Enhancing the non-infringement argument provides more strength to the negotiation and defense of the case. It is important that manufacturers build a professional intellectual property team to develop its patent portfolio. Establishing a pat-ent index and patent litigation database to collect information will enhance knowledge of NPEs so that manufacturers maybe more prepared for litiga-tion with NPEs.

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