Patent Assertion Entity Activity

in a timely manner would help alleviate the asymmetry problem. 22 Furthermore, early disclosure of
damages theories would flag potential legal issues for summary judgment motions and provide more
information for settlement discussions. In general, any measures that reduce discovery burden and costs
while ensuring discovery of information appropriate to the case should be considered.
Amend Federal Rule of Civil Procedure 7.1 to reach a broader range of non-party interested
entities or persons. 23 Federal Rule of Civil Procedure 7.1 requires all nongovernmental corporate
parties to identify “any parent corporation and any publicly held corporation owning 10% or more of its
stock” in its “first appearance, pleading, petition, motion, response, or other request addressed to the
court.” 24 The purpose of the rule is to “reach a majority of the circumstances that are likely to call for
[judicial] disqualification on the basis of financial information that a judge may not know or recollect.” 25
The FTC observed significant variation in how multi-affiliate Litigation PAEs organized their affiliate
companies, many of which existing Rule 7.1 would not cover. To provide defendants and the judiciary
with a better understanding of financial relationships relating to firms that may appear in the courtroom,
Congress and the Judicial Conference should expand the reportable relationships under Rule 7.1. 26
22
28 U.S.C. § 1404(a) (2012) (“For the convenience of parties and witnesses, in the interest of justice, a district court may
transfer any civil action to any other district or division where it might have been brought or to any district or division to
which all parties have consented.”).
23
This recommendation is consistent with the Administration’s recommendation that Congress “require patentees and
applicants to disclose the ‘Real Party-in-Interest,’ by requiring that any party sending demand letters, filing an infringement
suit or seeking USPTO review of a patent to file updated ownership information, and enabling the USPTO or district courts
to impose sanctions for non-compliance.” Press Release, The White House, Fact Sheet: White House Task Force on High-
Tech Patent (June 4, 2013), https://www.whitehouse.gov/the-press-office/2013/06/04/fact-sheet-white-house-task-force-hightech-patent-issues.
See also Public Comment from U.S. Dep’t of Justice & Fed. Trade Comm’n to the U.S. Patent &
Trademark Office Notice of Roundtable on Proposed Requirements for Recordation of Real-Party-in-Interest Information
Throughout Application Pendency and Patent Term (Feb. 1, 2013), https://www.ftc.gov/policy/policy-actions/advocacyfilings/2013/02/proposed-requirements-recordation-real-party-interest
[hereinafter Public Comment from U.S. Dep’t of
Justice & Fed. Trade Comm’n to the U.S. Patent & Trademark Office].
24
FED. R. CIV. P. 7.1.
25
FED. R. CIV. P. 7.1 Committee Notes on Rules (2002).
26
For example, the Civil Local Rules of the Northern District of California require any party that makes a first appearance in
any proceeding of the Court to disclose, “any persons, associations of persons, firms, partnerships, corporations (including
parent corporations), or other entities other than the parties themselves known by the party to have either: (i) a financial
interest (of any kind) in the subject matter in controversy or in a party to the proceeding; or (ii) any other kind of interest that
could be substantially affected by the outcome of the proceeding.” N.D. CAL. CIV. L.R. 3-15(b)(1); see also id. 3-15(b)(2)
(“For purposes of this Rule, the terms ‘proceeding’ and ‘financial interest’ shall have the meaning assigned by 28 U.S.C.
§ 455 (d)(1), (3) and (4), respectively.”).
11