Regulator Says U.S. Should Review Practices of ‘Patent Trolls’

June 21, 2013

The U.S. Federal Trade Commission should gather information about the business practices of “patent assertion entities,” known as patent trolls, to see whether they are hurting competition, the head of the commission said on Thursday.

Patent trolls are companies that buy the intellectual property of others and seek money from firms that infringe upon these patents.

The formation of these entities could trigger antitrust concerns, FTC Chairwoman Edith Ramirez said at an event hosted by the Computer & Communications Industry Association and American Antitrust Institute.

The commission is prepared to use enforcement authorities to protect small businesses from deceptive practices by patent trolls, Ramirez said.

The investigation that Ramirez proposed would use the agency’s 6(b) authority, which enables it to conduct wide-ranging economic studies that do not have a specific law enforcement purpose.

Ramirez said the rise of entities, which now account for more than 60 percent of all U.S. patent litigation, reflects “flaws in the patent system,” and that this attempt by the commission to gather information should be one part of a broader response.

Her speech comes weeks after the White House took steps intended to curb lawsuits by patent trolls.

On Thursday, Senate Judiciary Committee Chairman Patrick Leahy, Democrat of Vermont, wrote to Ramirez urging the FTC to crack down on patent trolls.

“Abusive behavior by some holders of low-quality patents continues to impede innovation and harm small businesses and consumers,” Leahy wrote. (Reporting by Diane Bartz, writing by Ros Krasny; Editing by Bernadette Baum)

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