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b'The infamous Blackberry case brought new attention to so-called \\u201cpatent trolls\\u201d and began the general association of trolls with \\u201cnon-practicing\\u201d patent holders. This has had important legal consequences: Namely, patent holders have been denied injunctive relief because they did not practice the patents themselves. In this paper we analyze how patent holders \\u2013\\u2013 both non-practicing and vertically integrated \\u2013\\u2013 choose their royalties depending on the structure of the upstream and downstream markets and the types of licensing agreements available. We show that a vertically integrated firm has an incentive to raise its rivals\\u2019 costs and to restrict entry on the downstream market; incentives that do not hold for non-integrated patent holders. An automatic presumption that a non-integrated patent holder will charge higher royalties than a vertically integrated company is therefore unfounded. Whether a company charges \\u201cexcessive\\u201d royalties depends on whether there is scope for hold-up, either because of sunk investments on the part of potential licensees or because of \\u201cweak\\u201d patents held by the licensor. These factors are orthogonal to whether patent holders are practicing or not'