Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC’s Patent Assertion Entity Workshop Outlines Antitrust Issues Concerning Patent Monetizers, (Dec 11, 2012)
Organizations Mentioned:Boston University | University of California
By Jody Coultas, J.D.
Patent Assertion Entities and their impact on innovation and competition were highlighted in the opening remarks of the Patent Assertion Entity Workshop, delivered December 10 by FTC Chairman Jon Leibowitz. The event was initiated by the FTC and Department of Justice to discuss issued related to Patent Assertion Entity (PAE) activity.
PAEs focus on purchasing patents form existing patent owners and make money by licensing the intellectual property to manufacturers that are already using the patented technology or litigating against those manufacturers. According to a research paper by the Boston University School of Law, PAE-generated revenue cost defendants and licensees $29 billion in 2009, which constituted a 400% increase from 2005. PAE suits are on the rise, according to another research paper by the University of California at Hastings.
Nearly 40% of patent litigation is brought by PAEs and settles before reaching a judgment on the merits, according to Leibowitz. Of the cases adjudicated on the merits, 92% are losses for the PAEs.
The PAE Workshop featured presentations on the increase in PAE litigation and the ways in which competition law can enhance the potential benefits and reduce the potential harms of PAE activity. Leibowitz’s remarks noted that the FTC could bring antitrust claims against those PAEs that engage in unfair methods of competition or misrepresent patents. The FTC also recommends improvements to notice requirements and recommends remedies to address issues with the patent system that may encourage PAE harm, according to Leibowitz.
The workshop also included a presentation from the U.S. Patent and Trademark Office’s efforts to improve transparency concerning ownership of patent applications and patents, a discussion of the upside and downside of the increases in PAE activity, and a session allowing industry representatives to present real-world experiences with PAEs.
Public comments on these issues will be accepted by the FTC through March 10, 2013.
News: Antitrust