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A Good Word

There are plenty of people who decry PAEs. “I hear from businesses—big tech companies, mom and pop stores, and everything in between—that this activity is tremendously damaging to them. It distracts management, adds to costs and hurts research and development. It is very bad for innovation, competition and consumers, too,” says Robin Feldman, professor of law at University of California, Hastings College of Law.

But patent assertion entities (PAEs) have their supporters, too. These supporters assert that by helping inventors profit from their inventions, PAEs promote research and innovation. “PAEs play an important role. Without them, there would be a slowdown in theU.S.innovation engine,” explains Paul Schneck, chair of Rembrandt IP Management, a patent consultancy.

Unfortunately, PAEs often do little to help inventors. “A remarkably small percentage [of PAE revenues] is going back to inventors,” Feldman says. “This is not a socially productive activity.”

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