Practical Considerations In The Indirect Deployment Of Intellectual Property Rights By Corporations And Investors

 

Competitive pressures and rent-seeking behaviors have motivated companies  and investors to develop indirect techniques for beneficially exploiting third-party intellectual property rights (IPRs) that qualitatively depart from the direct exploitation tools honed during the past thirty years of the ongoing pro-patent era. Companies and investors have learned that they do not even need to own IPRs in order to consequently benefit from their exploitation. This phenomenon is labeled here “IP privateering” because of its similarities to an historic method for waging war on the high seas. This Article probes certain practical limitations of this newly identified strategy. Specifically, this Article explores of the range of counterattacks available to the target of a privateering operation and finds that but for certain specific scenarios related to antitrust and market manipulation, the typical target will likely be required to prove that the privateer’s litigation was frivolous before any effective attack can be launched on the sponsor. This Article also explores how the rise of market intermediaries coupled with an oversupply of patents simplifies the sponsor’s task of equipping a privateer operation.