Patent Assertion Entity Activity

“amplified concerns about the effects of ex post patent transactions on innovation and competition.” 144
We recommended improving the notice function of patents so that it would be easier for implementers
either to begin licensing discussions before commercialization, or to design around the patented
technology. 145
On December 10, 2012, the FTC and DOJ jointly sponsored a public workshop to explore the impact of
PAE activities on innovation and competition, and the implications, if any, for antitrust enforcement and
146 147
policy. The agencies also solicited and received public comments in connection with the workshop.
Although workshop panelists and commenters identified potential harms and benefits of PAE activity,
they noted a lack of empirical data in this area, and recommended that the FTC use its statutory
authority under Section 6(b) of the FTC Act to collect confidential business information on PAE
acquisition, litigation, and licensing practices. 148 Senator Amy Klobuchar and Representative Daniel
Lipinski likewise called on the Commission to conduct a Section 6(b) study of PAE activity. 149
144
Id. at 8–9 (“Some argue that PAEs encourage innovation by compensating inventors, but this argument ignores the fact
that invention is only the first step in a long process of innovation. Even if PAEs arguably encourage invention, they can
deter innovation by raising costs and risks without making a technological contribution.”).
145
Id. at 9.
146
Press Release, Fed. Trade Comm’n, Federal Trade Commission, Department of Justice to Hold Workshop on Patent
Assertion Entity Activities (Dec. 7, 2012), https://www.ftc.gov/news-events/press-releases/2012/12/federal-tradecommission-department-justice-hold-workshop-patent.
The workshop was held on December 10, 2012. See Patent Assertion
Entity Activities Workshop, FED. TRADE COMM’N, https://www.ftc.gov/news-events/events-calendar/2012/12/patentassertion-entity-activities-workshop.
147
Public Workshop: Patent Assertion Entity Activities, U.S. DEPT. OF JUSTICE, https://www.justice.gov/atr/events/publicworkshop-patent-assertion-entity-activities#comments
(the workshop webpage contains a list of all 68 public comments).
148
See Transcript of PAE Activities Workshop, Fed. Trade Comm’n & U.S. Dep’t of Justice, at 33 (Dec. 10, 2012),
https://www.ftc.gov/sites/default/files/documents/public_events/Patent%20Assertion%20Entity%20Activities%20Workshop
%20/pae_transcript.pdf (testimony of Prof. Carl Shapiro) (“Now let’s look at, if we’re going to try to figure out, follow the
money, this is where there’s a good amount of empirical work, and more needs to be done.”); id. at 113 (testimony of Prof.
Tim Simcoe) (“So, in terms of comments, I liked Adam’s point about the importance of data and empirical evidence in this
entire debate.”); id. at 117 (testimony of Fiona Scott Morton, Deputy Assistant Attorney Gen., U.S. Dept. of Justice) (“But
what I’m hearing a little bit here is a call for empirical work. And a couple of points that came up on the panel, I think, were
asserted without really us having the data to do that.”); id. at 131–32 (testimony of Deputy Dir. Howard Shelanski, Bureau of
Econ.) (“I’ll reemphasize I think what to me are critical question, which is the empirical data, which will help us understand
the magnitude of these effects and the value of thinking about these problems holistically, and trying to access the net
benefits versus costs in a particular competitive context.”); id. at 141 (testimony of Prof. David Schwartz) (“And there are
few, if any, empirical comparisons, broad comparisons of PAE litigation in general, and other patent litigation.”); id. at 149
(testimony of Brad Burnham) (“So what I want to do here is say that as we talk about doing all of this research, I really
believe in empirical evidence, and I really think we should do it.”). See also Jonathan H. Ashtor, Michael J. Mazzeo &
Samantha Zyontz, Patents at Issue: The Data Behind the Patent Troll Debate, 21 GEO. MASON L. REV. 957, 977 (2014)
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