FTC Extends Public Comment Period for Proposed Patent Assertion Entity Study

PAEs are firms with a business model based primarily on buying patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency’s key missions — to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.

In December 2012, the FTC and the Antitrust Division of the United States Department of Justice (DOJ) jointly sponsored a workshop to explore the impact of PAE activity on innovation and competition. The FTC and DOJ also received public comments in conjunction with the workshop. While workshop panelists and commenters identified potential harms and efficiencies of PAE activity, they noted a lack of empirical data in this area, and recommended that FTC use its authority under Section 6(b) of the FTC Act. Responding to these requests, and recognizing its own role in competition policy and advocacy, the Commission proposed a study that will provide a better understanding of PAE activity, along with its costs and benefits.

The Commission vote approving the Federal Register notice announcing the extension of the public comment period was 4-0.