Patent Assertion Entity Activity

FTC examined the frequency with which Study PAEs sent demands, and the industries that most
frequently received demands.
Affiliates Sent Demand Communications
Study PAEs did not always begin licensing negotiations by sending demands to potential licensees. 191
While all four Responding Portfolio PAEs reported that they or their Affiliates sent demands, only ten of
the 18 Responding Litigation PAEs reported that they or their Affiliates sent demands during the study
period. 192
The Study PAEs that engaged in demand communication sent 2,274 total demands during the study
period, January 1, 2009 through September 15, 2014. Although Litigation PAEs as a group sent more
demands overall, Portfolio PAEs sent a larger number of demands per Responding PAE. A relatively
small number of the Responding PAEs were responsible for most of the demands: three of the
Responding PAEs and their Affiliates sent more than half of the demands in the study. 193 Finally, the
Litigation PAEs were collectively responsible for sending just over two-thirds of all demands in the
study.
In measuring how the Responding PAEs or their Affiliates sent demands, the FTC found that
Responding PAEs varied in their use of Affiliates. Two Responding PAEs reported sending demands
only in their own names. Another three Responding PAEs each reported that both they and their
Affiliates sent demands. The remaining nine Responding PAEs reported that 57 total Affiliates sent
demands and that they did not send any demands in their own names.
Overall, 68 Study PAEs sent demands. For the average Responding PAE that reported demands,
approximately five Affiliates sent demands, while the maximum number of Affiliates that sent demands
191
See Appendix A: Glossary of Frequently Used Terms. “Demand” means the first effort since January 1, 2009 to License
any Patent, in whole or in part, and any other attempt to generate revenue by authorizing a Person outside the Firm to practice
an invention claimed in a Patent. Demand does not include complaints or pleadings filed with a United States district court or
the United States International Trade Commission. Id.
192
Responding Portfolio PAEs are those Responding PAEs that followed the Portfolio PAE business model. Likewise,
Responding Litigation PAEs are those Responding PAEs that followed the Litigation PAE business model. See Table A.1.
193
The largest number of demands sent by a single Responding PAE and its Affiliates was 541.
59