Patent Assertion Entity Activity

Patent assignments were frequently recorded with the USPTO;
On average, Study PAEs tended to acquire patents several years before their expiration date;
Patents asserted in litigation generally were cited more frequently in other patents and patent
applications than either the population of patents overall, or the full study sample of patent
holdings that were not asserted in litigation; 298
Portfolio PAEs held more patents overall than Litigation PAEs.
This study does not contain a census of all PAE patents. 299 However, the FTC’s sample should include a
substantial fraction of all patents held by all PAEs during the study period. 300 Using Patent Freedom’s
estimate of individual PAE patent holdings in 2013, the FTC estimates that patents held by PAEs in the
FTC’s study represent more than 75% of U.S. patents held by all PAEs at the end of 2013. 301
Methodology
Responding PAEs were required to complete a series of questions concerning each patent held, by
themselves or their Affiliates or Holding Entities, at any time between January 1, 2009 and September
15, 2014. 302 The FTC asked for information on the priority date and expiration date of each patent,
reviews of the patent by the USPTO, legal and economic rights to the patent granted to outsiders,
298
The median litigated patent held by Litigation PAEs had 80% more citations than the average patent, controlling for age
and technology category, and the median litigated Portfolio PAE had 30% more citations than the average patent in this
control group. The FTC did not observe that Study PAEs used citation data to analyze their patent holdings.
299
To date, no study claims to identify all PAE patents. Due to a lack of information addressing patents held by PAEs in
general, previous research has focused on either litigated patents, or the holdings of a single firm. See, e.g., Fischer & Henkel,
supra note 98; David S. Abrams et al., Patent Value and Citations: Creative Destruction or Strategic Disruption, (Nat’l
Bureau of Econ. Research, Working Paper No. 19647, 2013), http://www.nber.org/papers/w19647.pdf.
300
See Appendix B: Methodology (detailing the sampling algorithm used to select study subjects). The algorithm was
designed to oversample the largest PAEs, measured by patents held and litigations filed, to capture the most economically
significant PAEs. Id.
301
Patent Freedom provided the FTC with an estimate of the total number of patents held by PAEs. See supra note 155 and
accompanying text.
302
See Appendix A: Glossary of Frequently Used Terms. “Hold” or “Held” means to possess a Legal Right to a Patent, where
“Legal Right” means any ownership interest in, an exclusive License to, or other rights adequate to License or enforce, a
Patent, and “Patent” means a United States patent or United States patent application as defined by 35 U.S.C. § 101, et seq.
Id.
125