Patent Assertion Entity Activity

Patent applications listed by Responding PAEs in their acquisition data did not appear to match
consistently to the USPTO assignment data. In particular, in a number of large patent transactions the
FTC was able to match all of the included utility patents reported by the Responding PAE to an
assignment in the USPTO data, while only matching a much lower percentage of the patent applications
included in the transactions. For this reason, patent applications were not included in the analysis.
Dropping patent applications left approximately 21,500 patents. Finally, PAEs can acquire the right to
assert patents via exclusive licenses, which are not recorded in the USPTO assignment data. Removing
patents that were obtained through an exclusive license rather than assignment left approximately 20,500
patents for the assignment calculations.
Responding PAEs provided data that contained the name of the entity that acquired the patents, the date
of the transaction, and the name of the entity that transferred the patents. These fields allowed the
Commission to match transactions between the data reported to the FTC and the USPTO using multiple
variables. Since name matches can be missed due to slight differences in reporting (LLC vs L.L.C. or
Inc.), the matching algorithm matched names based on the first word reported in the name field.
Matches where the first word in a variable was two characters or less were expanded to include the first
two words in the field to avoid over-matching on common terms (e.g., Dr. or Mr.). Manual inspection of
a five percent sub-sample of patents showed that the first word or first two words were sufficient to
match names accurately.
Methodology to Select Study Subjects: Additional Information
The FTC sought, and received, approval from the Office of Management and Budget (OMB) to collect
the information discussed in this Report. 376 As part of this process, the FTC described its methodology
to select study subjects. 377 The Commission explained that it would sample PAE subjects based on
measures of patent holdings and litigation activity provided by Patent Freedom and RPX. The FTC
further explained that after the initial sample was constructed, “[t]he FTC [would] then research whether
376
Under the Paperwork Reduction Act, 44 U.S.C. §§ 3501–21, federal agencies must obtain approval from OMB for each
collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that
members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. § 3502(3) (2012); 5
C.F.R. § 1320.3(c) (2016).
377
See Fed. Trade Comm’n, Supporting Statement for a Paperwork Reduction Act Submission to OMB, FTC Study of Patent
Assertion Entities, Part B, supra note 154 (describing the FTC’s selection methodology in more detail).
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