Preemptive Filing - Another Way of Looking at NPEs.

One the most damning misconceptions about non-practicing entities (NPEs), or pejoratively, “patent trolls,” is that these establishments secure patents with the sole intent of pursuing lawsuits with companies that actually produce the inventions that they’ve patented. Sure, that may happen with some NPEs, but what’s generally missing from pieces by journalists attacking NPEs is that many NPEs are actually trying to facilitate a more effective interface between the independent inventor and those that have established means to manufacture these inventions. David Kaefer, Microsoft’s director of business development for intellectual-property licensing, expresses this best by dividing NPEs into “patent speculators” (bad) and “patent aggregators,” such as Intellectual Ventures (IV):

As Kaefer puts it, “It’s a chess board of leverage and counter-leverage.” Entities like IV provide a variety of benefits for companies, he says, including one that might surprise you: By providing a venue to buy and sell patents, he says, such firms “reduce litigation.”

Historically, companies have invested in intellectual property after the “R” and before the “D” in the research and development cycle to prevent competitors from making or using products invented by a company. What we’re seeing now is the emergence of new business models that invest in the intellectual property before the “R,” upstream of the research. So you can gamble with the success of a product in two ways:

1. invest in R&D and protect inventions that prove to be implementable

2. invest in intellectual property and protect inventions that are predicted to be implementable

The intent to bring the product to market is still there. What’s the big deal with this business model?