Non-practicing entities (NPEs) are what we all recognize as patent trolls: individuals and firms who own patent rights to technologies for the sole purpose of suing people with the audacity to actually put said technology to use in innovative ways. These firms do not use the tech which they hold the rights to in any way, but instead rely on the patent rights to generate income by trapping legitimate companies in lengthy and costly lawsuits which siphon resources away from research and development efforts.
In recent years, the litigation costs associated with these types of lawsuits has absolutely skyrocketed, rising from $6.7 billion in 2005 to more than $29.2 billion in 2011. That figure doesn’t even take into account the indirect costs associated with defending against frivolous litigation such as resource diversion, new product delays, and significant losses in market share sustained during the litigation process.
Small businesses are among the most negatively affected by NPE litigation, as they are frequently forced to settle out of court in so-called “nuisance suits” for a few hundred thousand dollars. Small potatoes to bigger tech companies, but these kinds of suits can be absolutely devastating to the viability of a small business. The assistance of a personal injury lawyer can help protect your business against frivolous lawsuits, as a skilled attorney may be able to have baseless claims against your company dismissed.