Managing IP Summit: Lumping NPEs together is bad idea

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Managing IP Summit: Lumping NPEs together is bad idea

L to R: Jesse Bucholtz at Canon, Mike Schwartz at Xperi and Josh Budwin at McKool Smith

Speakers from Xperi, Canon and McKool Smith delved into NPEs and ways to fight them at Managing IP’s Intellectual Property and Innovation Summit

Companies shouldn’t tar all non-practising entities and licensing organisations with one brush, speakers at Managing IP’s Intellectual Property and Innovation Summit told delegates on Tuesday, May 24.

Counsel at Canon, Xperi and McKool Smith pointed out this week that NPEs come in all shapes and sizes and shouldn’t all be lumped under the term ‘patent troll’. Some noted that efforts to do so were sometimes underpinned by a desire to weaken the US patent system.

Mike Schwartz, senior vice president for intellectual property litigation at Adeia (a subsidiary of Xperi) in California, argued that it was important to distinguish nuisance lawsuit entities from sophisticated and organised licensors.

“To me, an NPE finds patents that are on the fringes and uses them for low-dollar and high-volume litigation campaigns,” he said.

“But that has to be differentiated from legitimate patent licensing organisations that stay close to a core mission and have robust R&D efforts and spend.”

Josh Budwin, principal at McKool Smith in Austin, noted that it might be useful to have a bucket for ‘bad’ NPEs and ‘good’ NPEs. He pointed out that while universities could probably be defined as NPEs because they had patents they didn’t practise, most people looked on them more favourably.

Adding to Budwin’s point, Schwartz said: “If the university is using revenue derived from the patents and feeding that back into further research, what they’re doing is fostering innovation. Innovation is not free, and I would suggest that such a monetisation policy is a good thing.”

Jesse Bucholtz, senior patent counsel at Canon in New York, agreed, and added that ‘NPE’ was a loaded term.

“The term is so unfair. What about an operating company that tried to go down a line of business and it didn’t work, but they have this huge portfolio around it. And what if someone else figured out a way to do it – in that situation, technically, is the operating company an NPE?”

“Patent trolls are the problem, not someone trying to monetise an asset when that’s their job.”

Fighting NPEs

Budwin then turned to the matter of whether more tools were needed to help companies fight patent trolls, pointing out that eBay, the creation of the Patent Trial and Appeal Board and venue reform have already served to stifle them.

He asked: “Do we need additional weapons to help combat bad NPEs or do enough already exist under the law?

“Do you pursue new tools to the point where you risk going too far and get bad law that makes it so legitimate, companies and research institutions are deprived of their ability to enforce their rights against large multinational companies with a lot of market power?”

Schwartz argued that the US had already reached that point and going further would be to risk diving into the realms of absurdity. He added that small inventors would be hit particularly hard.

“There are thousands of small inventors in the US, for whom it is nearly impossible to defend and enforce patents. They could easily get lumped in with the NPEs simply because they’re never going to have the resources to commercialise their inventions,” he said.

Budwin noted that it was also important to combat the threat of efficient infringement, pointing out that efforts to further hobble NPEs might inadvertently give more power to those organisations that implement patents without permission and without paying for them.

“There are those large multinational companies that decide it’s more beneficial to be an efficient infringer – the idea that if you infringe 10 patents, five of those owners won’t sue, three will be defeated on technicalities and one you’ll lose, but the settlement will be less that paying a licence.”

In-house counsel, private practice lawyers and other professionals gathered on May 24 at Managing IP’s Intellectual Property and Innovation Summit for panels on patent, trademark, trade secret and other IP issues.

 

more from across site and SHARED ros bottom lb

More from across our site

Alif Gultom and Andrew Diamond of Januar Jahja and Partners explain why Indonesia must adopt reforms against bad-faith filings and safeguard its trademark system for the future
In the third episode of a podcast series celebrating the tenth anniversary of IP Inclusive, we discuss the ‘Women in IP’ network and the current state of diversity within the profession
Practitioners, including two ex USPTO directors, say the Patent Eligibility Restoration Act could restore clarity and predictability to US patent law, though concerns remain
News of an alliance between two Malaysian law firms and the launch of a self-help video aimed at supporting IP professionals through menopause were also among the top talking points
Speakers at the EUIPO’s IP Mediation Conference discussed how lawyers can act in tandem with clients during mediation, and the importance of showing a united front
A report that revealed top legal LinkedIn influencers are generating hundreds of thousands in advertising value is the push lawyers need to up their social media presence
Speakers at the EUIPO’s Mediation Conference say mediation can offer a ‘cathartic’ and effective alternative to litigation that IP owners should consider
Partner Scott Sudderth says he is looking forward to building strong client relationships and expanding the firm’s patent practice
Find out which firms secured the most nominations for Managing IP’s Asia-Pacific Awards 2025, ahead of the winners being revealed on November 6
Raluca Vasilescu joins our ‘Five minutes with’ series to discuss patent mining and watercolour painting
Gift this article