Tuesday, November 20, 2012

Patent Alphabet Soup - FTC, DOJ, PAE, NPE

DOJ and FTC to discuss PAEs aka NPEs.

The Federal Trade Commission and the Department of Justice will host a one-day event on Monday, December 10, 2012 in the FTC Conference Center to explore the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy. FTC differentiates between PAEs and non-practicing entities NPEs such as universities, hospitals, and post-doctoral research organizations.  Panelists for the workshop will include academics, economists, industry representatives, and private attorneys.   The agenda can be viewed here.

According to the Wall Street Journal, DOJ and FTC is looking at, specialized patent-holding companies as part of a broad review of how holders of patents use them as strategic weapons against competitors. In particular, the agencies have expressed concern about companies that make aggressive legal claims based on patents that are part of industry technology standards. Antitrust enforcers also are interested in mergers or acquisitions that result in large transfers of patents.  Federal regulators are grappling with the changing face of the patent business. Nowadays the specialized patent company that tries to wrest royalties from a big technology company might not be an independent enterprise. Rather, it might be the creation of other big companies.

The workshop will provide interesting insight into the current mindset within the anti-trust and consumer protection communities on the issues surrounding the business practices and economic impact of patent assertion entities (non-practicing entities like universities are apparently off the hook here.)

Indicia of Extortion — filing nearly identical patent infringement complaints against a plethora of diverse defendants where the plaintiff follows each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation. The term was used by Judge Lourie in the CAFC decision in Eon-Net LP v. Flagstar Bancorp.