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non-practicing entity (NPE)

Contributor(s): Ivy Wigmore

A non-practicing entity (NPE) is someone who holds a patent for a product or process but has no intentions of developing it. 

A patent is a government-issued license that gives an inventor exclusive rights to the manufacture, use or sale of his invention for a specified time period. An NPE does none of those things.

A patent troll is one type of non-practicing entity. Patent trolls amass large numbers of patents with the intention of launching patent infringement suits against companies and individuals that they maintain have illegally used some element of something for which they hold the patent. In the United States, the Federal Trade Commission (FTC) uses the term patent assertion entities (PAEs) to distinguish patent trolls from non-practicing entities that have different motives.

Other types of non-practicing entities include universities and other research organizations and individual inventors lacking the resources to further develop something they have designed or created. 


 

This was last updated in October 2013

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