Tomotaka Hosokawa, LL.M. Class of 2026
One dominant trend in U.S. patent practice since the 2010s has been a sustained effort to curb opportunistic patent assertion, especially by so-called “patent trolls.” Drawing on the work of Robert P. Merges, as legal constraints on such opportunistic assertions have taken hold, U.S. patent litigation can increasingly be understood as a form of “ex post market-making”—a costly but information-rich process that can push parties toward a priced license.
From Anti-Troll Reforms to Market-Making
The core concern about trolls lies in the combination of timing and leverage. Here, “troll” is shorthand for a patent assertion entity that relies primarily on procedural leverage rather than technological merit. For instance, many “troll”-instigated disputes arose only after operating companies had launched their products. At that point, defendants were still recouping investments and could not easily withdraw an allegedly infringing feature from the product line. Moreover, trolls could use the possibility of an injunction and litigation costs as bargaining power. As a result, even weak patents could sometimes extract high-value settlements.
A series of reforms has reduced the leverage that made these patent assertions so potent. Inter partes review (IPR) at the Patent Trial and Appeal Board (PTAB) allows for early challenges to patent validity. Post-eBay, injunctions are no longer automatic, but instead require patentees to satisfy the traditional four-factor test for equitable relief. 35 U.S.C. § 101 (patentable subject matter) and § 112 (disclosure-related requirements) help narrow issues early. TC Heartland and related venue rules reduced forum concentration in plaintiff-friendly patent forums.
These measures collectively aim to draw a “troll line”—separating opportunistic assertion from legitimate rights enforcement. As these screens have taken hold—and injunctions have become harder to secure—many of the remaining disputes shift away from shutdown threats and toward royalty setting: the range of payments plausibly tied to the invention’s incremental contribution. In other words, on the legitimate side of the “troll line,” litigation can serve a different function: “ex post market-making.”
In an ideal world, licensing would occur ex ante—that is, before product launch or widespread adoption, and before infringement positions harden. In practice, ex ante bargaining is often hindered by uncertainty over product success, technological contribution, and validity risk, plus significant time and opportunity costs. Ex post, much of that uncertainty shrinks: sales, demand, alternatives, internal documents, and invalidity evidence become more readily available. Litigation is costly, but it can function as a structured bargaining process that pushes parties toward a settlement that often resembles a license—converging on both price (royalty) and scope (claim meaning). In that sense, litigation can operate as ex post market-making, producing a transaction when the market failed to do so beforehand. For example, in the high-profile dispute between Qualcomm and Apple, litigation across multiple jurisdictions ultimately culminated in a global settlement and licensing agreement, illustrating how post-dispute bargaining can converge on a priced license once key uncertainties are resolved.
From Injunction Leverage to Royalty Flows
If litigation can help produce a priced license ex post, the next question is where the money goes. The shift toward deal-making can also act as a channel that routes royalty payments to upstream contributors in markets that often become winner-take-all. Final-product manufacturers and platforms may capture most profits, while component suppliers and early R&D firms can struggle to recoup investment even when they contributed key technology. In such cases, patent enforcement may be undertaken not only by operating companies, but also by universities, research institutes, or pure R&D firms. Licensing triggered by litigation can, at least sometimes, provide a late-stage recovery path for those upstream innovators. That recovery path is most likely where upstream contributors retain enforceable rights or a contractual claim to licensing returns.
Signs of this shift are visible not only in ex post litigation, but also in the ex ante infrastructure that supports deal-making. In SEP-heavy markets—where standard-essential patents (SEPs), that is, patents that must be used to comply with a technical standard, are concentrated—Avanci attempts to make royalties look more like an accessible market price—standardized and available through one-stop licensing—so litigation becomes a pricing backdrop rather than the main event. A different kind of infrastructure appears in the LOT Network, which reduces NPE risk and lowers transaction costs by automatically licensing other network members if a patent is later transferred to a patent assertion entity. This institutional push fits a familiar pattern: when injunctions are hard to obtain, parties gravitate toward reasonable-royalty ranges; IPRs often reshape bargaining leverage early; and as decisions accumulate, benchmarks emerge that facilitate subsequent negotiations. When deals are reached and royalties flow, the beneficiaries are not limited to the firms that won in the product market.
A Comparative Question: Are Other Patent Systems Heading the Same Way?
In the United States, the post-eBay trend can be understood as a shift away from injunction-driven leverage and toward ex post revenue distribution through royalty-based outcomes. But that is not necessarily the direction of patent law everywhere. In a number of other jurisdictions, including Germany and Japan, injunctions may still play a stronger role in bargaining and enforcement. Whether the U.S. approach will become a broader model, or whether patent systems around the world will continue to evolve in different directions, remains an open question.