NPE litigation has become a prevalent issue in the intellectual property landscape. It affects many industries, including technology and manufacturing. NPEs target practicing companies for patent infringement, which can cause huge company losses because it may lead to legal risks and financial damages.
When faced with litigation, companies must carefully evaluate their options to settle quickly or prepare for a legal defence.
This article will discuss further about NPE and how a company or business can deal with NPE threats and litigation. If you own a business or company, read this article thoroughly.
Understanding NPEs (Non-Practicing Entities)
Non-practicing entities, or NPEs, are individuals or organizations, such as inventors, universities, or patent aggregators, holding patents but not commercializing or manufacturing products based on them. Their main purpose is to enforce their patents through licenses or litigation.
NPE can include individual investors and universities who haven’t pursued commercialization. However, this term is also often used negatively, referring to “patent trolls”.
This term occurs because the entities acquire patents primarily to take legal action against companies for infringement without using the patents themselves.
NPE purchases a patent portfolio from one company to enforce the right rather than develop the products themselves. This means they only want financial gain by filing litigation against the company.
In short, NPEs and Practicing Entities have patents but take different approaches to utilizing their patents.
Unlike NPE, Practicing Entities actively create, use, or sell products based on their patented inventions. They focus on commercialization through research and development, while NPE focuses on how they receive financial gain from the company.
The Landscape of NPE Litigation
NPE has become a significant part of the patent enforcement landscape, especially in industries like technology and pharmaceuticals. They acquire patents from investors or companies that are not actively using them. Then, they targeted them with legal action, which led to rising patent infringement lawsuits.
Instead, NPEs do not produce goods and focus solely on maximizing financial gains through settlements or court rulings. This has sparked much debate because it could hinder innovation and burden businesses with expensive legal defences.
These entities exploit the legal systems, forcing businesses to spend more on them. This may prolong cases and create financial risk as the companies have to deal with legal defenses and negotiations rather than developing new products and technologies.
Strategies to Mitigate NPE Risks
Facing NPE threats is not easy; companies or businesses need to prepare to avoid future headaches caused by these entities. You should not wait until you are targeted by NPE. To reduce the risk posed by NPEs, companies can enforce the following strategies:
1. Build a Strong Patent Portfolio
Invest in a comprehensive patent portfolio through active research and development. This will help businesses safeguard their intellectual property.
Holding key patents gives companies a stronger defence against NPEs. This will help them make the business a harder target for infringement claims.
2. Conduct Thorough Due Diligence
Rigorous due diligence is important when acquiring new technologies or entering a partnership. Companies should review the existing patent carefully to ensure they have the freedom to operate without infringing on another’s intellectual property.
Identifying potential NPE threats early can help avoid costly legal battles and secure patent insurance. This will help businesses in case they face NPE Litigation.
3. Develop a Legal Defense Strategy
A business must also prepare a good legal defence strategy for potential NPE claims. Consulting with a law firm such as Am Badar & Am Badar Litigation & Dispute Service is the right way to ensure businesses have a strong legal defence strategy. This will help companies to respond quickly and effectively when faced with litigation.
A good legal strategy minimizes legal exposure and helps businesses navigate lawsuits more efficiently, reducing the overall financial and operational impact of NPE claims.
Responding to NPE Litigation
Nobody wants to receive litigation as it poses high legal and security risks. Facing litigation can be hard. If your business or company receives one, here are the steps that you need to take:
1. Evaluate the Claim Thoroughly
When facing NPE Litigation, the first step is to conduct a detailed evaluation of the claim. Carefully analyze the patents involved and determine whether there is actual infringement.
This step involves working with your legal team and technical experts to assess the validity of the NPE’s allegations and identify potential defenses. A thorough initial assessment will help decide whether to settle or fight the case.
2. Consider Settlement Options
In many cases, settling with the NPE may be the most cost-effective approach, especially if the legal costs of prolonged litigation outweigh the settlement amount.
Companies should explore settlement negotiations if a drawn-out legal battle may cause a heavier financial impact. Settlement can also prevent future litigation by resolving disputes quickly and quietly.
3. Prepare a Strong Legal Defense
Businesses can develop a strong legal defence if a settlement is not an option. Contact legal defence experienced in NPE Litigation, such as Am Badar & Badar.
Intellectual property attorneys can help businesses formulate a litigation strategy that challenges NPE’s claim.
In today’s landscape, facing NPE litigation requires a strategic approach to protect your business and intellectual property. From evaluating claims to formulating a strong defence, each step is crucial in minimizing risks and legal costs.
Whether navigating settlement discussions or preparing for court, expert guidance can help you achieve a favorable outcome.
You should not face NPE litigation alone. You can consult with the experienced legal team at Am Badar & Am Badar Litigation & Dispute Service.
Attorneys at Am Badar & Am Badar will protect your business and guide you through complex patent disputes. Contact us now to start your consultation with our experienced representatives, or feel free to do some quick research on our insight page.
