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FTC, DOJ Focus Attention on Patent Assertion Entities

  • date icon December 10, 2012
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Today, the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) are holding a joint workshop to investigate the impact of Patent Assertion Entities (PAEs) on innovation and competition.

Last year, patent wars among major technology companies were all the rage due in part to PAEs, otherwise known as “patents trolls.” 


As this year comes to a close, PAEs continue to plague the Internet industry. 

So, what are PAEs?  These entities have no actual operation and are solely formed to create litigation by filing high numbers of patent infringement suits.

It’s no secret that the Internet plays a critical role in economic development and job creation.  However, PAEs are crippling the Internet’s ability to generate continued economic growth.

Fun facts:  Patents covering inventions applicable to businesses on the Internet are litigated nine times more often than other patents, even though PAE’s only win 12 percent of the time.  Ultimately, PAEs cost American companies billions of dollars in payouts.

The IA encourages companies (particularly small companies and start-ups) and individuals alike to use the Internet as a tool for the creation of dynamic new services and products.  However, we are concerned that PAEs threaten future ingenuity and innovation. 

The IA applauds the DOJ and the FTC for bringing together multi-stakeholders at today’s workshop to discuss this important issue.  We look forward to a productive discussion from workshop panelists and hope today’s meeting will shed light on PAEs impact on the U.S. economy.