Definition Edit

A litigation PAE

typically sue[s] potential licensees and settled shortly afterward by entering into license agreements with defendants covering small portfolios, often containing fewer than ten patents.[1]

Overview Edit

"The licenses typically yielded total royalties of less than $300,000. According to one estimate, $300,000 approximates the lower bound of early-stage litigation costs of defending a patent infringement suit. Given the relatively low dollar amounts of the licenses, the behavior of Litigation PAEs is consistent with nuisance litigation."[2]

"For each separate patent portfolio that they acquired, Litigation PAEs characteristically created a new affiliate entity, which often [hold] ten patents or less. They generally operated with little or no working capital and relied on agreements to share future revenue with patent sellers to fund their businesses."[3]

References Edit

  1. Patent Assertion Entity Activity: An FTC Study, at 4.
  2. Id.
  3. Id.
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