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Non-practicing entity (NPE)

Definition

A patent owner that does not make or sell products practicing its patents but earns money by licensing or asserting them. The pejorative term 'patent troll' refers to NPEs seen as using the high cost of litigationlitigationA lawsuit over patent infringement. Litigated patents often signal commercial importance.Read more → to extract settlements.

Where this comes up

Patent Trolls Explained

Related terms

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Patent

A government-granted right that gives an inventor the exclusive right to prevent others from making, using, selling, or importing a patented invention within the country that granted the patent, for a limited time. A patent does not give the owner the right to practice the invention — only the right to exclude others. The US issues three types: utility, design, and plant patents.

Non-obviousness

One of the three core requirements for a utility patent. An invention is non-obvious if someone with ordinary skill in the relevant field could not have easily combined existing knowledge to arrive at the invention. Non-obviousness (35 USC § 103) is the most frequently litigated and most difficult requirement to satisfy — the line between "obvious" and "not obvious" is contested in almost every patent case.

Non-provisional application

The "full" patent application examined by the USPTO — as opposed to a provisional application, which is a placeholder. A non-provisional application must include a complete specification, drawings (if necessary), at least one claim, and payment of the filing fee. The non-provisional is what gets examined and, if allowed, issues as a patent.

Notice of allowance

A document the USPTO sends when an examiner has determined that the claims in a patent application are allowable and a patent will be issued — once the applicant pays the issue fee. Receiving a notice of allowance means prosecution is essentially over. The applicant typically has three months to pay the issue fee.

Novelty

The requirement that an invention must be new — not previously known, used, or disclosed publicly anywhere in the world before the filing date. Under the America Invents Act (2013), the US uses a first-to-file system: the applicant who files first gets priority, regardless of who invented first. Even the inventor can destroy novelty by publicly disclosing the invention more than a year before filing.

Abstract

A brief summary (300 words or fewer) that appears at the top of every patent. The abstract describes what the invention does in general terms. Legally, it has almost no weight — courts use the claims to determine what a patent covers, not the abstract. The abstract is useful mainly for quickly scanning patents during a prior art search.

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