Patent Assertion Entity Activity

and NPE demand recipients and licensees. We suspect that these firms were not assigned an NAICS
code because they were relatively small foreign firms without U.S. operations (typically manufacturers
of computer and electronics products). To increase the fraction of firms for which we could assign an
industry, we conducted an Internet search to determine the primary industry of the unassigned Subject
Firms and applied the industry definitions provided by the NAICS. Ultimately, we were able to match
the vast majority of Subject Firms to primary industries. We matched 96% of Subject Firms described in
Chapter 3, Patent Assertion, to their primary industries, and we matched 94% of Subject Firms described
in Chapter 4, the Wireless Case Study, to their primary industries.
As discussed above, the NAICS categorizes industries at different levels of specificity, ranging from the
broadest two-digit level to the narrowest six-digit level. We used a data-driven approach to determine
level of specificity that would best describe our data. We first categorized Subject Firms at the broadest
level (two-digit) and noticed that a large proportion of firms in the sample fell into two broad industry
categories: “Manufacturing” (NAICS codes 31–33) and “Information” (NAICS code 51). For Subject
Firms in these two categories, we analyzed three-digit NAICS codes to gain more insight into which
sub-industries appeared to be especially prominent in the sample. Among manufacturers, we found that
a large fraction of firms operated in one three-digit industry category (“Computer & Electronic Product
Manufacturing”), and that the industries that other manufacturers operated in were quite diffuse. For this
reason, we report data for two categories of manufacturers: “Computer & Electronic Product
Manufacturing” (NAICS code 334) and “Manufacturing, all other,” defined as all manufacturers that do
not have a three-digit NAICS code of 334. Similarly, within the “Information” industry, we noticed that
there were a large number of firms operating in “Telecommunications” (NAICS 517) and
“Broadcasting” (NAICS 515) industries. Because many of the firms categorized as being in the
“Telecommunications” or “Broadcasting industries” were so similar (these firms tended to have large
operations in both what the NAICS categorizes as “Telecommunications” and “Broadcasting”), we
created a combined industry of “Telecommunications and Broadcasting” (NAICS 515 and 517). The
remaining firms operating within the “Information” industry (NAICS two-digit code 51) but not having
an NAICS code of 515 or 517 are reported as “Information, all other.” 375 Finally, a relatively large
number of the Subject Firms were classified as holding companies, which the NAICS places in an
375
“Information (other)” industry includes, but is not limited to, firms operating as “Software Publishers” (NAICS 5112),
“Motion Picture and Sound Recording firms” (512), and “Internet Publishing and Broadcasting and Web Search Portals”
firms (51913). 2012 NAICS, supra note 200.
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