FTC Seeks Public Comment on Investigation of Patent Assertion Entities | Practical Law

FTC Seeks Public Comment on Investigation of Patent Assertion Entities | Practical Law

The Federal Trade Commission (FTC) is soliciting public comments on proposed information requests to about 25 Patent Assertion Entities (PAEs).

FTC Seeks Public Comment on Investigation of Patent Assertion Entities

Practical Law Legal Update 0-543-6025 (Approx. 3 pages)

FTC Seeks Public Comment on Investigation of Patent Assertion Entities

by Practical Law Intellectual Property & Technology
Published on 27 Sep 2013USA (National/Federal)
The Federal Trade Commission (FTC) is soliciting public comments on proposed information requests to about 25 Patent Assertion Entities (PAEs).
The Federal Trade Commission (FTC) issued a notice and request for public comment on proposed information requests to about 25 companies comprised of Patent Assertion Entities (PAEs) and other entities asserting patents in the wireless communications sector including manufacturers and other non-practicing entities engaged in licensing. For purposes of the notice, the FTC defines a PAE as a firm with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against people already practicing the patented technology. After receiving and considering the public comments, the FTC will submit a request to the Office of Management and Budget (OMB) to seek clearance of the FTC's proposal to issue compulsory process orders seeking information from the PAEs.
The FTC's press release mentions that in December 2012, the FTC and the Antitrust Division of the US Department of Justice (DOJ) jointly sponsored a workshop on PAE activity's impact on innovation and competition. The workshop panelists and commenters noted a lack of empirical data and recommended the FTC use its authority to gain more information, leading to this information request.
The notice specifically proposes to gather information on the following questions:
  • How do PAEs organize their corporate legal structure, including parent and subsidiary entities?
  • What types of patents do PAEs hold and how do they organize their holdings?
  • How do PAEs acquire patents and how do they compensate prior patent owners?
  • How do PAEs engage in assertion activity (like demand, litigation and licensing behavior)?
  • What does assertion activity cost PAEs?
  • What do PAEs earn through assertion activity?
The notice also includes the specific information requests that the FTC proposed to send to the PAEs and other entities.
Comments can be submitted electronically here and will be accepted until 60 days after the notice is published in the Federal Register.