The words “patent troll” brings a shudder to the ranks of Silicon Valley executives. These are non-practicing entities (NPEs) whose main business is to own patents — enforcing their rights by charging fees or suing. Critics believe that their behavior impedes innovation because it will make others hesitant about developing new technology in the same area. Legislation is underway on the federal and state level to rein them in. But the paper, “The NPE: Benevolent Middleman or Stick-Up Artist?” points to evidence that patent trolls can actually help innovation, as well as potentially impede it, according to authors David S. Abrams, a professor of business economics and public policy at Wharton and the University of Pennsylvania Law School, Ufuk Akcigit of the University of Chicago and Gokhan Oz, Penn economics graduate student.
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