One man’s patent troll is another man’s patent protector. Originally established to protect inventors from patent infringers, NPEs—or Nonpracticing Entities—have come under severe criticism for not practicing the inventions of their patents but rather focusing on licensing and litigation. Recent legislation and Supreme Court cases have changed the playing field making it harder for NPEs to win their patent infringement cases and broadening the effects of a case lost.
To understand how the changing NPE model affects attorneys, Law360 interviewed Joey Liu of One LLP for his insight as a litigator who has both represented and defended against NPEs. “For attorneys who are willing to take on these riskier cases, we’re seeing some of the economic terms of contingency cases shifting toward attorneys receiving extra compensation, taking higher percentages of fees recovered or having separate agreements to offset costs,” Liu says. “So now, attorneys are negotiating whether to handle [certain expected labors] as part of the contingency fee agreement or as part of a separate agreement.”
However, patents that do survive the new, more rigorous process come out stronger. NPEs are becoming more critical of patents they buy, as well as beginning to help develop these patents so they can defend them more fully in court.