Patent Assertion Entities (PAEs) in India: A Critical Study of Regulatory Frameworks and Enforcement

Patent Assertion Entities (PAEs), often referred to as ‘patent trolls,' buy up patent inventions to create a revenue stream from licensing, rather than commercialising them, through threat of litigation. This practice is a fundamental transformation and imbalance in the global innovation ecosystems. The paper compares the PAE phenomenon in the developed economies of the United States, Germany, Japan and United Kingdom with that of some developing economies such as China, Brazil and South Korea and explores the implications of the comparison for India. This study, based on empirical evidence from the last 24 years (2000-2024), identifies staggering cost the PAE-related litigation has had on the global economy at USD 29-80 billion per year. It is noteworthy that over 60% of all U.S. patent litigation are now involving non-practicing entities (NPEs). The paper reviews 5 key cases and discusses the legislative and judicial response in various jurisdictions to come up with a policy plan for the patent ecosystem in India. Finally, the paper suggests specific amendments to the Patents Act 1970 and proposes the introduction of 'fee-shifting' mechanisms, as well as FRAND reform of the regulatory framework and improved international cooperation in the development of patent quality standards.