FTC reportedly planning sweeping probe of patent trolls

Agency's investigation will include questions about whether patent assertion entities coordinate their lawsuits, The New York Times reports.

The chairwoman of the Federal Trade Commission is expected Thursday to propose a sweeping inquiry into companies created to extract licensing fees from other companies rather than make products based on their patents, according to The New York Times.

FTC Chairwoman Edith Ramirez will ask the full commission to support a proposal for an investigation that would include subpoenaing patent assertion entities (PAE), also known as patent trolls, the Times reports. The move comes after the Obama administration announced a set of executive actions earlier this month aimed at reining in certain PAEs amid concerns they are abusing the current system and squelching competition.

The FTC investigation, which is expected to be approved, would require patent-holding companies to answers questions related to how they conduct business, including whether their lawsuits are coordinated with other patent-holding companies, the Times reported.

The percentage of patent infringement lawsuits filed by PAEs has increased dramatically in the past few years. According to a study conducted last year by a patent law professor in California, about 62 percent of all patent lawsuits filed in 2012 were brought by PAEs, up from about 29 percent two years earlier.

Earlier this month, President Obama announced five executive actions and seven proposed legislative changes that, among other things, instructed the U.S. Patent and Trademark Office to initiate a rule-making process that would require patent holders to disclose the owner of a patent.

Patents and intellectual-property protection have become an increasingly important topic in technology, with companies building up massive patent collections to fend off, as well as go on the offensive against, other companies. Most recently there's been the high-profile feud between Apple and Samsung, with the two companies suing each other in courts around the world for patent infringement. There have also been the spats between Google and Oracle, and Apple and HTC.

 

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