An inside view to non-practicing entities business models: a case study

Abstract

While patents have been essential to the business models of many firms for a long time, it is only in recent years that there has been a renewed interest in how patent exploitation and enforcement may be used as an autonomous business model to generate revenues and competitive advantages. Non-practicing entities (NPEs), entities which purchase or acquire patents only to enforce them to generate revenues, have taken advantage of a business opportunity in creating various business models centred solely on the exploitation and enforcement of patent rights. However, few empirical studies have been conducted on how NPE business models precisely function, likely due to the private nature of such entities and their strategic patent transactions. This study aims to further our knowledge on the NPE phenomenon by providing a unique glimpse into the method of operations of six NPE business models and how they engage in the strategic management, exploitation and enforcement of patent rights.