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The Myths and Facts of Patent Troll and Excessive Payment: Have Non-Practicing Entities (NPEs) Been Overcompensated? - A Commentary

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  • Blogg, Jonathan

Abstract

The much-cited article ‘the Myths and Facts of Patent Troll and Excessive Payment: Have Non-Practicing Entities (NPEs) Been Overcompensated ’ by Jack J. Lu is fundamentally flawed and based on data which cannot be retrieved. The key error results from poorly defined samples, selected to substantiate the statement that hold-up does not exist and that Non-Practicing Entities are not overcompensated. Even if the article had succeeded in adequately selecting the samples subject to the analysis, the document would still fall short of determining what constitutes a comparable licensing agreement. Also, the findings cannot be verified as the article does not disclose the underlying data that leads to the conclusion that NPEs are not overpaid. Hence, the paper falls short of meeting three fundamental requirements of empirical research. There is no adequate selection of the two samples that are compared (the NPE sample and a vaguely defined sample of ‘other companies’), there is also no adequate selection of comparable rates and last but not least, the data cannot be retrieved. Other than that, the research paper suffers from the application of concepts which are not defined and lacks adequate references to the academic literature. These aspects taken together mean that it is not possible to draw any sorts of conclusions on the grounds of the analysis presented and render the article obsolete.

Suggested Citation

  • Blogg, Jonathan, 2020. "The Myths and Facts of Patent Troll and Excessive Payment: Have Non-Practicing Entities (NPEs) Been Overcompensated? - A Commentary," MPRA Paper 100069, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:100069
    as

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    File URL: https://mpra.ub.uni-muenchen.de/100069/1/MPRA_paper_100069.pdf
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    References listed on IDEAS

    as
    1. Koss, P. A. & Eaton, B. Curtis, 1997. "Co-specific investments, hold-up and self-enforcing contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 32(3), pages 457-470, March.
    2. Carl Shapiro, 2010. "Injunctions, Hold-Up, and Patent Royalties-super-1," American Law and Economics Review, American Law and Economics Association, vol. 12(2), pages 509-557.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    hold-up; Non Producing Entities; NPEs; licensing rate; valuation; Patents; unfair excessive pricing;
    All these keywords.

    JEL classification:

    • K1 - Law and Economics - - Basic Areas of Law
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K3 - Law and Economics - - Other Substantive Areas of Law
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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