AAI Applauds FTC Investigation of Patent Assertion Entities

Dec 16 2013
Testimony and Interventions

The AAI has filed public comments with the Federal Trade Commission (FTC) applauding the agency's investigation of patent assertion entities (PAEs), commonly known as patent trolls, pursuant to Section 6(b) of the Federal Trade Commission Act.  After the FTC announced its investigation into PAE business practices and their impact on competition and innovation, the agency solicited public comments on proposed information requests to be sent to 25 PAEs and 15 distinguishable entities that also assert patents.  The FTC will review these comments before seeking clearance from OMB to proceed in issuing compulsory process orders.

In its comments, the AAI commended the FTC for this worthwhile exercise of its 6(b) authority.   PAE enforcement practices can harm competition, innovation, and consumers by raising rivals’ costs, erecting barriers to entry, and subverting collaborative standard setting.  They can also run afoul of Sections 1 and 2 of the Sherman Act, Section 5 of the FTC Act, and Section 7 of the Clayton Act.  Although the AAI believes the FTC's investigation would yield important findings about PAEs and help provide for a more comprehensive competition policy response, the AAI offered several suggestions that would expand and refine the information requests in ways that would allow the FTC to understand more fully whether PAEs and other related entities have violated the antitrust laws.

The comments were prepared by AAI Special Counsel Sandeep Vaheesan.

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