Patent market dynamics: In view of the business model of non-practicing entities

The emergence of Non-Practicing Entities (“NPEs”) influences patent market dynamics. Based on a database of NPE activities from 1996 to 2010, this paper attempts to investigate these influences in view of NPEs' heterogeneity. We found NPEs with prominent R&D involvements can integrate knowledge from the innovation and patent markets, and might therefore generate valuable patents and facilitate effective technology transfer. Hence, when compared with NPEs without any R&D involvement, R&D-performing NPEs appeared able to monetize their patents without resorting to excessive litigation. Thus, different NPEs could exert different influences and drive patent market dynamics in their own respective ways.