By now, most directors and executives have heard of patentlawsuits being filed by non-practicing entities (NPEs)—morecommonly known as “patent trolls.” These are companies that ownpatents but do not use those patents to produce products or provideservices. Instead, these entities are in business solely to collectlicensing fees or legal settlements from the patents they own. Theypursue these outcomes through litigation or the threat oflitigation, against businesses whose products or services allegedlyinfringe on the patents.

Although the concept of patent trolls may be familiar, fewmembers of the C-suite recognize just how large and costly aproblem these businesses have become. In 2012 alone, the cost ofNPE-generated litigation was nearly $11 billion, according toa recentstudy conducted by RPX, in collaboration with theCoalition for Patent Fairness. More than 2,400 unique companiesfaced at least one NPE assertion of patent infringement last year,and 270 companies fought three or more NPE lawsuits. Clearly,patent risk has become a serious strategic and operationalrisk.

Nevertheless, most companies continue to treat patents andpatent litigation purely as the province of the legal department.They are relying on legal tactics to solve what has become a marketproblem. For risk managers at all operating companies that sell oruse technology products or services, the time is ripe for a radicalshift in thinking. It's time to insist that patents become a moreintegral part of the company's overall risk-mitigationplanning.