Patent Privateers and Antitrust Fears

Posted by Social Science Research Network

Patent Privateers and Antitrust Fears

By Matthew G. Sipe (Yale University)

Abstract:         Patent trolls are categorically demonized as threatening American innovation and industry. But whether they are a threat that antitrust law is equipped to deal with is a complex question that depends on the particular type of patent troll and activities they engage in. This Article looks specifically at privateer patent trolls: entities that acquire their patents from operating entities and assert them against other industry members. In the particular context of privateering, antitrust law is almost certainly not the proper legal solution. Privateering does raise significant issues: circumventing litigation constraints, evading licensing obligations, and raising the cost and frequency of patent assertions. Nevertheless, there are clear doctrinal and practical roadblocks to leveraging antitrust law to police privateering activity generally, and there exist readily available alternative regimes that are more naturally suited to the task. Antitrust law’s role in governing privateering activity should instead be more narrowly guided by its unique strengths, such as limiting collusive behavior.

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