Patent Assertion Entity Activity

as quickly as possible. For Portfolio PAEs, 83.7% of licensees included only a lump-sum payment,
13.5% had only a running royalty, and 2.8% included both a running royalty and lump-sum component.
Table 3.2: Percentage of Patent Licensing Agreements with Given Characteristics
Portfolio
PAEs
Litigation
PAEs
Cross
License
Contract Terms
Field of
Use
Restriction
Geographic
Restriction
Lump
Sum
Only
Payment Terms
Running
Royalty
Only
Both Lump
Sum and
Running
Royalty
Components
4.4% 71.8% 6.0% 83.7% 13.5% 2.8%
0.0% 1.9% 1.9% 99.2% 0.3% 0.5%
Note: Total Portfolio PAE licenses reflected in the table is 252 for contract terms and 215 for payment terms
(payment terms were calculated only using data for licenses reporting positive revenues). Total Litigation
PAE licenses reflected in the table is 2,463 for contract terms and 2,149 for payment terms.
License Terms Typically Extended Until the Licensed Patents Expired
Responding PAEs had to report the dates of termination of all licenses identified on behalf of themselves
and their Affiliates. 241 Most Responding PAEs indicated that their licenses terminated when the licensed
patents expired. The prevalence of this contact term was likely due to settled law holding that a patent
license that extends beyond the expiration of the licensed patent is unenforceable. 242 When the effective
date of the license extended beyond patent expiry, it typically extended six years beyond the expiration
of the last patent to expire, presumably to address the six-year window for recovering patent damages. 243
241
Appendix C: PAE Special Order, Specification H.3.l (“State the duration of the License agreement?”).
242
See Brulotte v. Thys Co., 379 U.S. 29, 32 (1964) (holding that a patent holder cannot charge royalties for the use of his
invention after its patent term has expired); see also Kimble v. Marvel Ent’t Co., 135 S. Ct. 2401, 2405 (2015) (holding
same).
243
35 U.S.C. § 286 (2012) (“Except as otherwise provided by law, no recovery shall be had for any infringement committed
more than six years prior to the filing of the complaint or counterclaim for infringement in the action.”).
87