"Troll" Check? A Proposal for Administrative Review of Patent Litigation

Lauren  Cohen; John  Golden; Umit  Gurun; Scott Duke Kominers

Article | Boston University Law Review

"Troll" Check? A Proposal for Administrative Review of Patent Litigation

by Lauren Cohen, John Golden, Umit Gurun and Scott Duke Kominers

Abstract

The patent system is commonly justified as a way to promote social welfare and, more specifically, technological progress. For years, however, there has been concern that patent litigation is undermining, rather than furthering, these goals. Particularly in the United States, the time, cost, and complications of patent suits provide openings for opportunistic assertions of infringement. This article proposes a way to address information problems that facilitate opportunistic assertion: an automatic process of administrative review at the threshold of infringement lawsuits in U.S. district courts. The results of this review would be nonbinding but admissible in later court proceedings. Whether conducted by an independent Patent Litigation Review Board or a division of the U.S. Patent and Trademark Office, such review would (1) help discourage—or bring to an earlier and less costly end—relatively weak patent-infringement lawsuits; (2) strengthen the litigation and bargaining positions of patentees with especially robust cases; (3) flag weaknesses in litigation positions to the benefit of private parties and the courts; and (4) provide policymakers with information that facilitates evaluation and adjustment of patent-system performance. This article uses multiple economic models to show the likely benefits of early stage administrative review. Nonetheless, because of the fluid and complex nature of the patent litigation landscape, this article proposes that the review process initially be adopted on a pilot basis.

Keywords: Patent trolls; Patents; Lawsuits and Litigation;

Format: Print

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Citation:

Cohen, Lauren, John Golden, Umit Gurun, and Scott Duke Kominers. "Troll" Check? A Proposal for Administrative Review of Patent Litigation. Boston University Law Review 97, no. 5 (October 2017): 1775–1841.

Connecting life insurance policyholders with potential investors (called Life Settlement Providers), Ashar Group plays a pivotal role in the industry. Its current position is, however, increasingly being challenged by consumer-direct models, led by major providers seeking to shortcut brokers. Ashar faces a strategic dilemma in cooperating—but also in competing—with these providers. Maintaining a mutually beneficial dynamic with policyholders, downstream intermediaries, and other actors thus constitutes a balancing act. The context of this case is an underdeveloped market whose reputation has suffered from broker misconduct. In light of the market’s legacy issues and competing business models, this case study explores strategies Ashar may pursue to secure and enhance its market position. Discussions emerging from this case study have the potential to illuminate directions for market transformation.

Background Note | HBS Case Collection | June 2018

Introduction to Life Settlements

Alexander Braun, Lauren H. Cohen, Christopher J. Malloy and Jiahua Xu

Life insurance is an asset owned by the majority of American adults (61%). Note that this 61% penetration rate is essentially at parity with home ownership (64%), and higher than that of 401(k) retirement account ownership (53%). Life settlements, or life insurance settlements, allow individuals to sell their life insurance policy in a secondary market. A life insurance policy is a tradable asset, for many individuals possibly the most valuable one in their portfolio after real estate and perhaps a retirement account. The fact that the policy is tradable, however, is hardly known to the general public. When surrendering a policy to the insurance carrier, the policyholder often incurs a substantial discount on its economic value. At the same time, the insurer keeps the difference between the policy’s economic value and its surrender value. By selling a policy in the secondary market, in contrast, it is common to achieve a price markedly above the surrender value. Hence, life settlements allow policyholders to capture a much larger, if not full, share of their contracts’ economic value. In this Industry Note, we lay out the basic structure of the market, the important players, and the basic economics. We also go into the potential ways to maximize returns in this market for both investors and policy holders.

Keywords: Insurance; Assets; Value; Markets; Investment Return;

Citation:

Braun, Alexander, Lauren H. Cohen, Christopher J. Malloy, and Jiahua Xu. "Introduction to Life Settlements." Harvard Business School Background Note 218-127, June 2018. View Details

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"Troll" Check? A Proposal for Administrative Review of Patent Litigation

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