FTC Releases Report on Patent Assertion Entities, Calls for Reforms to Reduce Nuisance Patent Lawsuits

Jurisdictions: United States of America

Authors: Kay Lynn Brumbaugh, John H. McDowell, Jr., Susan A. Smith, John R. Seward and Sushila Chanana

Law firm: Andrews Kurth

Subject:

The U.S. Federal Trade Commission issued its much anticipated study on patent assertion entities (“PAEs”) on October 6, 2016. The report, entitled Patent Assertion Entity Activity: an FTC Study, defines a PAE as “a firm that primarily acquires patents and seeks to generate revenue by asserting them against accused infringers.” The report highlights the business practices of PAEs (based on non-public data from 2009 to 2014) and includes recommendations for patent litigation reform.

FTC Chairwoman Edith Ramirez praised the report for providing “an empirical foundation for ongoing policy discussions,” and said that the report’s recommendations “are designed to balance the needs of patent holders with the goal of reducing nuisance litigation.”

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