Legal Analysis On NPEs And Improvement Of Chinese Relevant System

With the economy of knowledge developing and technology refreshing rapidly, the number of patents increases rapidly. Transferring and licensing the right of patents (applications) appears and develops rapidly which promotes the establishment and development of patent trading market. Traditional patent trading mode is facing profound Challenge, some emerging patent business entities are on the stage. In order to achieve profit, they are no longer engaged in traditional products or services, but obtaining a license fee or compensation through patent licensing or patent litigation, which is generally referred to as "None-Practicing Entities" (NPEs). The purpose of the patent system that gives inventions a certain period of monopoly power in exchange for full disclosure of the invention to the public promotes the advancement of technology and the development of society. Whether NPEs are abusers of the patent system or those who improve patent business efficiency? How to make a balance between private property and social innovation? How should our government respond? These problems are needed to be solved.The first part of this Paper is about an overview of NPEs, a brief analysis of the connotation of NPEs and to distinguish the concept of Patent Troll, which is a manifestation of the former, and then explain the basic features and operating modes of NPEs. Then the paper recognizes that the emergence of NPEs is the inevitable result of the development of the patent system, because the attendant will have positive and negative impacts. Then the paper analyzes the causes for the negative effects of NPEs from four aspects--the development of enterprise patent strategy, too many questionable patents, patent infringement relief system and patent litigation system. Then the paper explores the adjustment of U.S. regulatory measures for the phenomenon of NPEs. According to China’s current conditions, with the development of Chinese patent market, although the impact of NPEs on competition and industrial development of China’s market is not particularly obvious, storage benefit is bound to give huge temptation to foreign NPEs and domestic institutions. Trying to make recommendations according to NPEs may exploit vulnerabilities exist in our system. Severing NPEs frequent litigation channels for quick profits by improving the patent system, and thus inhibit its destructive without damaging its positive side. Given NPEs major rise in the United States, so the study of this paper is to discuss under U.S. law and jurisprudence background.