Patent assertion entities (PAEs) are a hot topic these days. Sometimes referred to as non-practicing entities or patent trolls, PAEs generate revenue by acquiring and enforcing intellectual property against potential infringers. While not all PAEs are inherently harmful, PAEs have different patent enforcement incentives from companies that develop and/or sell commercial products. A PAE’s unique structure enables it to aggressively pursue royalty licensing agreements in circumstances where a producing company might not, which can impact and raise significant concerns for multi-national corporations and small businesses alike.
Akin Gump attorney George Laevsky recently published an article discussing the renewed interest that antitrust enforcers have displayed in patent assertion entities. The article analyzes the unique characteristics of patent assertion entities that enable them to develop expertise in acquiring, enforcing and maximizing revenue from their patent portfolios. George’s article further overviews recent public statements by Federal Trade Commissioners on their evolving enforcement policies for handling PAE misconduct, including commentary on the FTC’s forthcoming 6(b) study to investigate the actual economic effects of PAE enforcement activities. The article concludes by discussing recent FTC and state attorneys general enforcement proceedings against a notorious PAE that allegedly targets small businesses with misleading license royalty demand letters.
The article was originally featured in the April 2014 issue of the American Bar Association, Section of Antitrust Law, Federal Civil Enforcement Newsletter. To read the article, please click here.