Patent Assertion Entity Activity

Recommendations

Info

largest number of patents held at the end of 2013 will receive a score of 1.0. All other NPEs will receive a score that is the ratio of their observed number of patents held to that of the largest NPE. The FTC will then sum the two component scores will be summed to form the overall weighting statistic that will determine both the stratum to which the NPE is assigned and, ultimately, the probability of the NPE being included in the comparative wireless chipset study. The FTC will define strata by non-overlapping ranges of the combined activity score, where the ranges are determined after the scores for all of the NPEs in the sample are determined. Because the FTC is relying on third party estimates of NPEs for the initial selections, the FTC will select more NPEs than are ultimately included in each stratum to create a candidate sample. After the initial selection is complete, the FTC will sort the selected candidate sample NPEs within each stratum according to their activity score. FTC staff will then research whether the selected firms meet the FTC’s definition of an NPE (i.e. firms with a business model based primarily on developing and transferring their patented technologies) and whether the firm is asserting patents in the wireless chipset sector. Once the number of verified firms matches the number of firms allocated to each stratum, the FTC will drop the remaining candidate firms from the sample. 2. Description of Information Collection Procedures This is a one-time collection that will not create a repetitive burden for respondents. For the first case study, the FTC proposes sending information requests to approximately 25 PAEs that use different organizational models and assertion strategies. (The sampling methodology is described in Part 1 of this document.) For instance, the proposed requests seek information on the composition of PAE portfolios (information such as the age and field of patents); whether any patents are essential to any standards or encumbered by other licensing obligations; the costs of acquiring patents, as well as whether the PAEs share an economic interest in their portfolios with other entities. The requests also seek information about assertion activity, such as licensing and litigation activity, and the costs from assertion. The second case study compares how PAEs, manufacturing firms and other firms assert intellectual property in the wireless chipset sector. For example, the FTC seeks to explore whether the potential for countersuit against manufacturing firms changes their respective assertion behavior relative to PAE firms. While some commenters suggested expanding the scope of the comparative case study, the FTC proposes limiting that case study to the wireless chipset sector because that sector is relatively well-defined with a significant amount of assertion activity by PAEs, manufacturing firms, and other firms. This limitation also permits the FTC to achieve its goal of performing a comparative analysis of assertion behavior without imposing an undue burden on respondents. For the second case study, the FTC proposes sending information requests to approximately 9 manufacturing firms and approximately 6 NPEs who assert patents in the wireless chipset sector. The information requests sent to manufacturing firms and NPEs who assert patents in the wireless chipset sector will have fewer questions than the information requests sent to PAE respondents. It will not include subparts relating to patent holdings, patent portfolios, and patent acquisition. It also will only request information for the subset of respondents’ assertion activity related to the wireless chipset sector. 6 F - 7
The FTC will send one set of information requests to each respondent. The requests will call for both the production of non-privileged documents as well as the provision of information in both narrative and spreadsheet form. Wherever practical, the FTC will ask for short responses that can be provided as spreadsheet entries, such as dates, dollar amounts, and “yes” or “no” responses. The FTC also will provide a spreadsheet template that will include sample responses and formatting instructions. Because the FTC will carefully direct information requests toward significant aspects of the respondents’ business activities, the FTC expects that respondents will have much of the requested data available in an organized electronic form. Consequently, the FTC expects that the spreadsheet will reduce the respondent’s burden. In addition, the use of a spreadsheet will reduce the FTC’s burden in analyzing responses. A. Information Collection The information to be collected in each subpart is discussed below: 1. Firm Information The proposed information request for both case studies will include one subpart related to the respondents’ corporate form and organization, including identification of parents, subsidiaries, and related firms. As noted in Part A, information related to how PAEs are organized is relevant to both patent reform legislation and other policy responses to PAE activity. This subpart comprises several questions calling for a narrative response. Because the FTC expects that respondents will have this data available in electronic form, it encourages electronic submission to reduce the respondent’s burden. 2. <strong>Patent</strong> Information The proposed information requests for the PAE case study will include one subpart asking for information related to each patent held by the respondent since January 1, 2009. As noted in Part A, information regarding PAE patent holdings is relevant to a number of policy issues. To reduce the burden to respondents, the FTC has coordinated with the United States <strong>Patent</strong> and Trademark Office (USPTO). In this section, the FTC will request that respondents provide a spreadsheet listing the patent number for each relevant patent so the FTC can crossreference this data with data obtained from the USPTO. By doing this, the FTC will reduce the burden to respondents because it will reduce production of publicly available data. The proposed information request also will ask for non-public information regarding the patent, including whether third parties hold any interests in the patent and whether any party has performed a valuation of the patent. In addition, the proposed request will ask respondents to provide information regarding the history of each patent, such as whether the patent has ever been licensed or asserted in litigation. To reduce the respondent’s burden, wherever practical, the FTC will seek a “yes” or “no” response, or a simple categorical or numerical response. To further reduce the respondent’s burden, the FTC will provide respondents with a template spreadsheet to answer “yes,” “no,” categorical and numerical requests. Some requests, however, will require narrative responses. Other requests will require respondents to produce specific documents, for example existing 7 F - 8
Page 1 and 2:
Patent Assertion Entity Activity AN
Page 3 and 4:
Table of Contents EXECUTIVE SUMMARY
Page 5 and 6:
Litigation Outcomes................
Page 7 and 8:
Executive Summary and Recommendatio
Page 9 and 10:
Table A.1: Categories of PAEs in FT
Page 11 and 12:
generated royalties of less than $3
Page 13 and 14:
most frequently by Study PAEs, or (
Page 15 and 16:
litigations tended to settle early;
Page 17 and 18:
in a timely manner would help allev
Page 19 and 20:
In December 2015, however, an amend
Page 21 and 22:
Chapter 1: Introduction and Backgro
Page 23 and 24:
corresponded to various types of NP
Page 25 and 26:
PAE’s enforcement of that patent
Page 27 and 28:
In one of the earliest studies, Jam
Page 29 and 30:
defendants that will arise in the l
Page 31 and 32:
entrepreneurship and related invest
Page 33 and 34:
and efficient marketplace for paten
Page 35 and 36:
The FTC and the DOJ supported USPTO
Page 37 and 38:
the brief observed that the share o
Page 39 and 40:
Greater transparency of patent owne
Page 41 and 42:
only egregious misconduct, as Justi
Page 43 and 44:
In September 2013, the Commission b
Page 45 and 46:
were intended to generate a sample
Page 47 and 48:
The FTC’s study has two parts. Th
Page 49 and 50:
Litigation PAEs: Litigation PAEs ty
Page 51 and 52:
licenses. There was little overlap
Page 53 and 54:
guaranteed revenue and zero risk. T
Page 55 and 56:
agreements exclusively. These agree
Page 57 and 58:
Larger Litigation PAEs also used th
Page 59 and 60:
determine whether it has already li
Page 61 and 62:
epresented as unique docket numbers
Page 63 and 64:
Prior to initiating the study, the
Page 65 and 66:
FTC examined the frequency with whi
Page 67 and 68:
Study PAEs sent demands to relative
Page 69 and 70:
from related PAEs may help them neg
Page 71 and 72:
Electronic Product Manufacturing”
Page 73 and 74:
arely generated license agreements
Page 75 and 76:
In addition, four Responding PAEs a
Page 77 and 78:
Litigation PAEs and Portfolio PAEs
Page 79 and 80:
Table 3.1 provides the distribution
Page 81 and 82:
Figure 3.5a: Technology Category of
Page 83 and 84:
PAE cases and 44% of Litigation PAE
Page 85 and 86:
Figure 3.6: Frequency Distribution
Page 87 and 88:
Figure 3.7: Proportion of Study PAE
Page 89 and 90:
portfolios of patents, which typica
Page 91 and 92:
manner and extent to which Respondi
Page 93 and 94:
as quickly as possible. For Portfol
Page 95 and 96:
Study PAEs Generated Approximately
Page 97 and 98:
likely seeks to avoid the possibili
Page 99 and 100:
factor of 10. This analysis include
Page 101 and 102:
Figure 3.10a could be the result of
Page 103 and 104:
Figure 3.11: Number of Licenses Inv
Page 105 and 106:
granted licenses to firms operating
Page 107 and 108:
Turning to specific assertion behav
Page 109 and 110:
The preceding considerations have l
Page 111 and 112:
Chapter 4 first describes how Wirel
Page 113 and 114:
A Small Number of Targets Received
Page 115 and 116:
These percentages suggest that both
Page 117 and 118:
worldwide wireless chipset sales du
Page 119 and 120:
with 75% of their settlements occur
Page 121 and 122:
Wireless Respondents’ Licensing A
Page 123 and 124:
Table 4.2: Percentage of Wireless P
Page 125 and 126:
license with that entity, whereas P
Page 127 and 128:
Most Wireless Licensees Operated in
Page 129 and 130:
Conclusion The FTC’s goal in stud
Page 131 and 132:
Patent assignments were frequently
Page 133 and 134:
Figure 5.1: Size of Patent Holdings
Page 135 and 136:
Classification. 309 As of the time
Page 137 and 138:
while USPTO economists estimate tha
Page 139 and 140:
categories were Other Electrical &
Page 141 and 142:
More Than 75% of Study Patents Incl
Page 143 and 144:
Affiliates and Holding Entities, he
Page 145 and 146:
Figure 5.5: Age Distribution of Stu
Page 147 and 148:
eceive more citations than other ca
Page 149 and 150:
1.5 and the median was 0.6, meaning
Page 151 and 152:
Table 5.1: Percentage of Acquired P
Page 153 and 154:
Appendix A: Glossary of Frequently
Page 155 and 156:
“PAE Special Order” means the i
Page 157 and 158:
Appendix B: Methodology Introductio
Page 159 and 160:
contained more than 9,100 variants
Page 161 and 162:
of the dispute as of the end of the
Page 163 and 164:
Affiliates to a single industry. 37
Page 165 and 166:
industry called “Management of Co
Page 167 and 168:
the selected firms meet the FTC’s
Page 169 and 170:
owning 10% or more of its stock.”
Page 171 and 172:
Delaware avoided disclosing any inf
Page 173 and 174:
SPECIFICATIONS A. Identification of
Page 175 and 176:
(2) identify, from the following li
Page 177 and 178:
(2) identify, from the following li
Page 179 and 180:
(a) state the total amount paid in
Page 181 and 182:
(3) did the Firm grant an exclusive
Page 183 and 184:
H. Patent Assertion Information 1.
Page 185 and 186:
Do not report revenue reported for
Page 187 and 188:
f. Does the License relate to a Wir
Page 189 and 190:
(e) provide a narrative response st
Page 191 and 192:
1. Separately, for each year since
Page 193 and 194:
APPENDIX A A. General Instructions
Page 195 and 196:
“Patent” means a United States
Page 197 and 198:
For district court and bankruptcy c
Page 199 and 200:
Number Ending Reference Number Cust
Page 201 and 202:
(i) (ii) (iii) (iv) For productions
Page 203 and 204:
APPENDIX B Certification This Speci
Page 205 and 206:
SPECIFICATIONS A. Identification of
Page 207 and 208:
(1) state the jurisdiction; and (2)
Page 209 and 210:
e. Identify, from the following lis
Page 211 and 212: (1) state the total revenue the Fir
Page 213 and 214: (1) identify the geographic restric
Page 215 and 216: F. Aggregate Cost Information 1. Se
Page 217 and 218: 3. Produce, and provide a narrative
Page 219 and 220: Microsoft Word and PDF versions. Fo
Page 221 and 222: U.S. Patent numbers shall be provid
Page 223 and 224: (ii) Submit emails in image format
Page 225 and 226: Filename with extension Production
Page 227 and 228: (v) (vi) For each document withheld
Page 229 and 230: APPENDIX E: SUPPORTING STATEMENT FO
Page 231 and 232: “strongly urge[s] the FTC to foll
Page 233 and 234: The proposed case studies will prov
Page 235 and 236: What strategies do PAEs employ to a
Page 237 and 238: competition, innovation, and intell
Page 239 and 240: proposed requests “are a rational
Page 241 and 242: study questions and removed questio
Page 243 and 244: Some of the proposed requests for d
Page 245 and 246: Response: The Commission has narrow
Page 247 and 248: increase are not well understood.
Page 249 and 250: equests include interactions betwee
Page 251 and 252: In contrast, several commenters bel
Page 253 and 254: average burden for each of the appr
Page 255 and 256: enefits), and 320 research assistan
Page 257 and 258: PART B - COLLECTION OF INFORMATION
Page 259 and 260: stratum. The FTC will sum the two s
Page 261: Freedom and RPX use public sources
Page 265 and 266: will have one entry for each acquis
Page 267 and 268: are two reasons why it is important
Page 269: Federal Trade Commission ftc.gov
show all

Patent Assertion Entity Activity

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?