Patent Assertion Entity Activity

asserted fewer than 1% of their holdings in litigation. 305 Even though Portfolio PAEs held significantly
more patents overall, Litigation PAEs litigated more patents than Portfolio PAEs. There was
considerable variation across Litigation PAEs. Three Litigation PAE reported having litigated all of
their patents, but most Litigation PAEs litigated fewer than half of their holdings.
The Majority of Study Patents Related to Computers &
Communications Technologies
Earlier literature suggested that PAEs focused their efforts on asserting patents related to electronics and
software and rarely asserted patents in drug and chemical technologies. 306 The GAO, for example,
estimated that 84% of patent infringement lawsuits brought by PAEs involved software patents. 307 To
develop a better understanding of the technologies of patents acquired by PAEs for assertion, the
Commission conducted an empirical analysis of the technology categories associated with all patents
held by the Study PAEs and Holding Entities. Although there were no dramatic differences in the
composition of patents held by Litigation and Portfolio PAEs, to facilitate comparison to results
discussed earlier in the report, all findings were reported separately between Litigation PAEs and
Portfolio PAEs.
The FTC relied on the USPTO patent classification, supplemented by the NBER patent data set, to
describe the general technological subject matter of the patents in the study sample. 308 The USPTO
assigns every U.S. patent one principal mandatory technology classification, known as its Primary
305
These figures are based upon responses regarding each patent that Holding Entities and Study PAEs held, and may include
assertions that commenced outside of the study period. For this reason, the findings in this chapter do not exactly match
similar findings described in Chapter 3.
306
See, e.g., Allison et al., supra note 46, at 18; Hagiu & Yoffie, supra note 96, at 59; Risch, supra note 95, at 477; Shrestha,
supra note 96, at 145.
307
2013 GAO REPORT, supra note 2, at 22 (estimating that “[b]y defendant, software-related patents were used to sue 93
percent of the defendants in PME suits and 46% of the defendants in operating company suits.”). The GAO defined a patent
monetization entity (PME) as an entity that “buy[s] patents from others for the purpose of asserting them for profit.” Id. at 2.
Because this definition is nearly identical to the FTC’s use of PAE, the FTC relied on the GAO’s estimate for PMEs as an
estimate for PAEs.
308
The USPTO maintains the U.S. Patent Classification System, which organizes all U.S. patents and many other related
documents based on common subject matter. See generally U.S. PAT. & TRADEMARK OFFICE, OVERVIEW OF THE U.S.
PATENT CLASSIFICATION SYSTEM (USPC) (2012),
http://www.uspto.gov/sites/default/files/patents/resources/classification/overview.pdf.
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