FTC Seeks Public Input On Investigating PAEs

Nearly ready for a cat nap...
after commenting on the FTC.

This Kat was preparing for an early start to the weekend when she noticed this article in the New York Times describing an announcement by the US Federal Trade Commission (FTC) that it is seeking public input on a proposal to gather information about the internal operations of Patent Assertion Entities (PAEs).  The FTC would use the information it gathers to determine whether PAEs engage in anti-competitive behaviour in connection with which the FTC would seek formal redress. 

The FTC explains,

"[t]he Commission, however, has unique Congressional authority to collect nonpublic information, such as licensing agreements, patent acquisition information, and cost and revenue data, which will provide a more complete picture of PAE activity. 

Because the Commission believes a broader study will enhance the quality of the policy debate surrounding PAE activity, it proposes information requests directed to 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 (i.e. demand, litigation, and licensing behavior)?
• What does assertion activity cost PAEs?; and
• What do PAEs earn through assertion activity?

"To understand how PAE behavior compares with patent assertion activity by other patent owners in a particular industry or sector, the FTC also proposes sending information requests to approximately 15 other entities asserting patents in the wireless communications sector, including manufacturing firms and other non-practicing entities and organizations engaged in licensing."

[This Kat suggests that the FTC can learn the answers to at least some of its questions by listening to "When Patents Attack", a podcast produced by National Public Radio's This American Life, previously highlighted by the IP Kat here.]

Any readers wishing to submit comments to the FTC on this matter may do so using this link.  Comments are welcomed from interested persons, US or foreign.  [Merpel wonders if comments from felines are also welcomed...]

This FTC proposal was inspired by President Obama's directive to US federal agencies to “protect innovators from frivolous litigation” by developing strategies and undertaking intiatives that disincentivize patent troll behaviour.