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

The rapid commercialisation of technology has fostered the rise of Patent Assertion Entities (PAEs) or "patent trolls", which acquire patents not to manufacture products but to extort disproportionately high licensing fees through frivolous infringement litigation. This opportunistic behaviour significantly burdens practising companies, draining resources from research and development (R&D) and stifling the innovation market. This paper conducts a critical and comparative analysis of PAE behavioural economics and the effectiveness of regulatory frameworks across the United States, the European Union, and India to identify optimal statutory and judicial deterrence mechanisms. Empirical evidence reveals NPEs target cash-rich firms regardless of actual infringement, leading to a 20% reduction in R&D at targeted firms. While the US system historically facilitated such litigation, the Indian patent framework, through stringent working requirements, compulsory licensing and aggressive post-grant objections, structurally dismantles the PAE business model. By comparing why certain legal systems succeed while others fail, these insights help businesses use India’s "working requirement" as a model for building stronger defences against abusive patent lawsuits.