FTC chairwoman takes aim at ‘patent trolls’

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Posted: Sunday, June 23, 2013 12:00 am

WASHINGTON — A Federal Trade Commission investigation into the practices of “patent trolls” is necessary because there is little real evidence about the costs and benefits of a rising tide of patent litigation, according to Edith Ramirez, the FTC chairwoman.

At a patent and antitrust seminar here last week, Ramirez laid out her recommendation for the FTC to use its subpoena power and begin a sweeping inquiry into patent trolls, a derogatory term for patent-assertion entities, or PAEs, as they are called by the FTC. The companies buy bundles of patents and make money by threatening infringement lawsuits.

Despite the rapid growth in the number of lawsuits filed by those patent-focused companies, regulators have little more than anecdotal evidence of how patent trolls affect business innovation, Ramirez said, and whether the patent-enforcement companies help to produce benefits that small companies could not enjoy on their own.

“We 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,” she said.

However, she added, the activity of patent-assertion entities “raises tough competition policy and enforcement issues that defy a one-dimensional answer.”

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