Watch Out: NPEs Are Coming To Canada!

NPEs, otherwise known as non-practicing entities, or pejoratively referred to by some as "patent trolls", have seen a significant negative impact on their business model south of the border. NPEs are analogous to private equity businesses–their business model is to acquire undervalued patent assets and turn around and sell or license them to others, which often leads to expensive patent litigation. If their assets are depreciating in value, the model becomes significantly less attractive. This is exactly what is happening in the US.

Recent US Supreme Court decisions including Alice, which restricted the scope of patent-eligible subject matter, and eBay, which limited the ability of NPEs to obtain injunctions, along with the post-grant review processes introduced under the America Invents Act, have significantly depreciated the value of some US patent portfolios held by trolls. On average, there have been about eleven Section 101 decisions per month in the US federal