Legal Nuances When a Patent-Holding Company Seeks to Enforce a U.S. Patent

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The patent-holding company business model, so prominent in today’s patent litigation, has its drawbacks. A patentee’s status as a nonpracticing entity, e.g., a patent-holding company, can dramatically impact the scope of remedies available for patent infringement, particularly in the areas of obtaining lost-profit damages and injunctive relief. The fact that a patentee does not practice the patent can, in some circumstances, impact procedural aspects in an infringement litigation such as the patentee’s ability to resist motions to transfer venue, limit jurisdictional contacts for declaratory judgment actions asserted against the patent, and even resist motions to stay an infringement action pending a PTO reexamination. This paper, by the author of the patent law treatise "Annotated Patent Digest," discusses the current state of the law for these topics as applied to the various types of patent-holding companies; the licensing-only patent-holding company, the manufacturer subsidiary patent-holding company, and the educational or commercial research entity.

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