Patent Npe Attack Short
In plain terms
Patent trolls — shell companies that own patents but don't make anything — sue tech firms to extract settlements. We short the defendant when one of these suits drops because the legal overhang typically depresses the stock for a few months.
How it works
Non-practicing-entity (NPE / "patent troll") suits drain real cash from operating defendants via settlement and legal fees plus a behavioural injunction overhang. Cohen-Gurun-Kominers 2019 documents significant 3-12mo abnormal under-performance among NPE-campaign defendants. Tech firms are targeted disproportionately.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Patent litigation
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- -2% to -5% over 6-12mo
- Tested over
- T+0 to T+40d
Cohen-Gurun-Kominers 2019: 2-5% abnormal underperformance over 6-12mo on NPE-campaign defendants.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Patent-lawsuit signal -- currently inactive. We can see which companies are in patent suits but the free CourtListener feed does not tell us who won or the exact verdict date, so we cannot trade the win/lose direction the research describes. The family is paused (no signals) until that data is added.
Markets under-react when companies are granted high-value patents (measured by 3-day stock reaction at grant). Firms with valuable recent patents outperform by 3-5%/yr.
Explore Patent Npe Attack Short on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.