Patent Assertion Entity Activity

owning 10% or more of its stock.” Several jurisdictions have local rules that modify the language of
Rule 7.1. The Northern District of California, for example, requires that parties “list all persons,
associations of persons, firms, partnerships, and corporations … that may have a pecuniary interest in
the outcome of the case.” 385 When necessary, the FTC obtained these disclosures, which would
sometimes identify related firms.
In some instances, identified firms also provided relevant information in connection with motion
practice. On occasion, a plaintiff would provide a declaration with information regarding the acquisition
and assignment of an asserted patent in opposition to a motion to dismiss for lack of standing due to a
defective assignment. In other cases, parties would submit information regarding the scope and extent of
a firm’s activities in conjunction with a motion to transfer venue. In addition, in the small handful of
cases that proceeded to trial and the firm’s owner testified, that testimony offered a clear description of
the history and activities of the firm. Finally, some identified firms were involved in unrelated
litigation—such as fee disputes with their attorneys—that shed light on their activities.
The FTC also performed an extensive search of corporate records with state departments of state. The
information provided by each state varied considerably. 386 Texas, for example, provided the principal
place of business, names and addresses of each officer and member, the identity of the registered agent,
and the identity of parent and subsidiary firms for each identified firm established in the state. Delaware,
in contrast, would provide only the name and address of a registered agent. In some states, these
databases were searchable and the FTC was able to identify additional firms by searching for the names
of owners or officers. 387
The FTC conducted an extensive analysis of the material that it obtained from public sources. In some
cases, this material would explicitly identify a parent firm and lead to the identification of other related
firms. In other cases, the material pointed to a pattern of interactions that suggested common direction,
but could not establish common ownership under one parent firm. For example, some entities acquired
385
N.D. CAL. CIV. L.R. 7.1-1.
386
There was often a fee associated with obtaining these records.
387
The FTC observed that the different LLCs of the same PAE often had the same manager who would sign state filings on
their behalf.
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