Federal Trade Commission Looks To Take Down Patent Trolls
June 21, 2013

Federal Trade Commission Looks To Take Down Patent Trolls

redOrbit Staff & Wire Reports - Your Universe Online

Federal Trade Commission (FTC) Chairwoman Edith Ramirez said on Thursday that the agency should conduct a comprehensive investigation into "patent assertion entities," or so-called "patent trolls," a derogatory term for companies whose sole business is suing over patents.

These companies typically purchase the intellectual property of others, and then seek money from those that infringe upon those patents.

Ramirez’s remarks come one day ahead of a press conference in which the commission is expected to announce it will kick off a broad investigation into patent trolls, The New York Times reported.

The investigation that Ramirez proposed would use the agency's so-called 6(b) authority, named after the section of the FTC Act that gives the commission authority to conduct a study that does not have a specific law enforcement purpose.

While the study is not a criminal investigation, the FTC will be able to use subpoena powers to do things that private litigants and activist groups can't, such as determining how much money patent trolls are making and where the funds are going.

The study will not make information about individual patent-trolling companies available to the public, but will instead aggregate the data and compile a report that could serve as a launching pad for government reform efforts.

The FTC’s investigation into patent assertion entities (PAEs) is only the latest in a number of anti-troll actions the government has made this year. Ramirez’s speech, which took place at a patent debate hosted by the American Antitrust Institute and the Computer and Communications Industry Association (CCIA), comes just weeks after the White House took steps intended to curb lawsuits by patent trolls. And Congress has introduced five anti-patent-troll bills this year alone, while the FTC and the antitrust division of the Justice Department conducted a joint workshop on patent assertion entities in December.

On Thursday, Senate Judiciary Committee Chairman Patrick Leahy (D-VT), wrote to Ramirez urging the FTC to crack down on patent trolls.

"Abusive behavior by some holders of low-quality patents continues to impede innovation and harm small businesses and consumers," Leahy wrote.

Ramirez said that antitrust enforcers “have a role to play in advancing a greater understanding of the impact of PAE activity and using our enforcement authority, where appropriate, to curb anticompetitive and deceptive conduct.”