Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Commissioner Brill encourages action against anticompetitive patent assertion entities, (Dec 11, 2014)

By Greg Hammond, J.D.

FTC Commissioner Julie Brill presented the keynote address on December 10 at the conference, “Scrutinizing Patent Assertion Entities: What Competition Enforcers are Doing,” organized by the American Antitrust Institute and Computer & Communications Industry Association. In her address, Brill discussed the Commission’s investigation into patent assertion entities (PAEs), and encouraged action by other agencies and lawmakers against anticompetitive PAE conduct.

According to Brill, PAEs try to gain profits by purchasing patents, and then either licensing the patents to companies that already use the patented technology or by suing those companies. Reports demonstrate that PAE-initiated law suits are rising, which some find to be positive. However, the FTC is concerned with “privateering”—when a PAE has legal or economic ties to a manufacturing firm and is therefore incentivized to assert patent rights against the manufacturer’s competitors, thereby burdening competition in targeted markets.

Although the Commission is in the midst of a 6(b) study of PAE activity, Brill notes that there is no need to wait for the results before resolving some of the most pressing problems surrounding PAEs. She stated that while some recent Supreme Court cases and FTC law enforcement actions are promising, “further reforms to the patent litigation system are clearly warranted to make it more difficult for PAEs and others that seek to profit by bringing and threatening to bring frivolous patent infringement lawsuits.”

Specifically, “An important part of patent reform should be to require that complaints provide specific allegations of what infringes a patent’s claims and how the defendant infringes them,” Commissioner Brill said. “And more should be done to ensure that victims of frivolous patent cases are made whole, including allowing them to recover their costs for attorneys’ fees and discovery costs, or to ensure that the likelihood of having to make such large expenditures in the first place are reduced through streamlined discovery processes.”

Brill also noted that there are multiple bills before Congress that would further discourage frivolous lawsuits and improve patent quality, but still, action is needed now. “For the FTC, we should use all the tools our founders gave us to pursue our mission of protecting competition as it shapes the economy and consumers as they navigate the markets. They expected us to think and act, and when it comes to PAEs, or any of the other myriad of competition issues under our jurisdiction, that is exactly what you can count on us to do.”

News: Antitrust FederalTradeCommissionNews