Patent Assertion Entity Activity

Further investigation of the PAE business model, including a workshop in 2012, 33 led the Commission
to initiate this study—the first use of its Section 6(b) authority to investigate transactions in the
intellectual property marketplace. The research presented in this report uses both public and non-public
information to shed new light on PAE business models, including detailed data describing PAE assertion
behavior and patent holdings. 34
Based on the overall findings of this study and consistent with the FTC’s history of recommending
improvements to patent law to facilitate the benefits of patent rights, while minimizing practices that can
“discourag[e] follow-on innovation, prevent[] competition, and rais[e] prices through unnecessary
litigation and licensing,” 35 the FTC recommends that policymakers address PAE litigation asymmetries
through procedural and substantive reform.
selling a patented invention for 20 years. By preventing copying that might otherwise drive down prices, the patent system
allows innovators to recoup their investment in research and development.”)
33
In December 2012, the FTC and the Antitrust Division of the United States Department of Justice held a joint workshop to
explore the claimed harms and efficiencies of PAE activity. Patent Assertion Entity Activities Workshop, FED. TRADE
COMM’N, https://www.ftc.gov/news-events/events-calendar/2012/12/patent-assertion-entity-activities-workshop.
34
The FTC estimates that the litigation reported in this study represents at least 8.8% of all patent suits filed in the U.S.
during the study period. Infra notes 182–184, and accompanying text.
35
FTC EVOLVING IP MARKETPLACE REPORT, supra note 1 (referring to invalid or overbroad patents and explaining that, as a
result “many of the recommendations in the [FTC PROMOTE INNOVATION REPORT] focused on improving patent quality as a
means of balancing exclusivity and competition.”).
14