Recent concerns over alleged patent system abuse by non-innovating, non-practicing patent assertion entities have led to many patent reform proposals. This is the second article in a three-part series addressing some of these proposals. In Part I of this series, we started with the understanding that the U.S. patent system is a great system for innovation that, like all thriving systems, needs occasional tending and improvement. We examined a proposal to establish uniform procedural rules for patent infringement cases. In this article, we consider proposals that seek to protect “end users”—businesses that simply buy and use an off-the-shelf product.
So why the concern about assertions against end users? Historically, a practicing entity—a company that makes or sells products or services—rarely brought infringement claims against end users. Such end users tend to be the practicing entity’s current or potential customers, as suing one’s customers generally is not a good business practice. Whether the entity is continuously innovating also is a factor. A non-practicing entity that actively invests in R&D to continuously innovate is less likely to price gouge end users on patent licenses, in order to encourage adoption of future innovations.