On Dec. 10, 2012, the Department of Justice and the Federal Trade Commission held a joint workshop regarding “Patent Assertion Entity (PAE) behavior.” A PAE is generally defined as an entity that acquires patents from existing owners. The FTC explained that the workshop was designed to examine “the economic and legal implications of PAE activity, as distinct from prototypical ‘non-practicing entity’ (NPE) activity, such as developing and transferring technology. By contrast, PAE activities often include purchasing patents from existing owners and seeking to maximize revenues by licensing the intellectual property to (or litigating against) manufacturers who are already using the patented technology.”
The workshop was structured as a series of panels with representatives from industry and the academic community, including economists and practitioners. The panelists addressed topics such as the realities of licensing and litigation practices, the potential effects that the assertion of patent rights can have on competition and innovation, and how antitrust laws apply to the potential inefficiencies and harms that can result from PAE behavior. FTC Chairman Jon Leibowitz, who delivered the opening remarks, made clear that the FTC has at its disposal Section 5 of the FTC Act to challenge unfair methods of competition in response to PAE behavior. The FTC and DOJ are accepting public comments until March 10, 2013. Links to the DOJ and FTC websites, including instructions on how to submit comments, are available here: DOJ, FTC.