Research On Litigation Strategy Of Patent Assertion Entities Based On Game Theory

Patent Assertion Entities(hereinafter referred to as "PAEs")refers to firms that rely on the ownership of patent rights to prosecute the accused infringer to generate profits.Patents owned by PAEs are generally not acquired through their own research but through the acquisition of other patents.The basic model of PAEs litigation is to obtain patent rights and profit-making of PAEs by patent.Profit-making of PAEs by patent are mainly divided into five stages:selecting the target company,send demand letter,licensing a patent,filing patent litigation and obtaining compensation.Due to PAEs litigation may lead to the negative impact of wasting social resourcesThis paper focuses on whether PAEs acquire patent rights before sue,whether PAEs choose to file a lawsuit when preparing to file a lawsuit,whether PAEs choose a settlement strategy after filing a lawsuit.This paper constructs the game theory model through game participants,game strategy and game benefit to calculate the Nash equilibrium.Game theory to conduct in-depth analysis of the strategy,based on revenue to calculate PAEs tendency to choose the strategy.When analyzing the game gains,its earnings are related to factors such as corporate profitability,patent quality,patent licensing fees,winning rates,negotiation costs,litigation costs,operating costs,and compensation costs after losing case.Research shows that under the free economy,the market will spontaneously form a situation in which PAEs obtain a large number of patent before litigation,to realize a large amount of patent reserves,PAEs still tend to obtain patents when there is a return on investment of less than zero;PAEs will not tend to choose a prosecution strategy until;under certain conditions are met;the condition that PAEs have sufficient evidence of corporate infringement,companies will tend to choose reconciliation strategies.In order to curb PAEs litigation,this paper proposes proposals for responding to PAEs litigation strategies from the perspectives of companies,industry organizations,and governments,based on the starting point of increasing PAEs litigation costs and reducing PAEs revenues.