Patent News

Apr. 27, 2016

IP Watchdog: What Can We Learn from the FTC’s Patent Assertion Entity Study?, by Fritz Scheuren

This post originally appeared in IP Watchdog on April 27, 2016.

Any day, the FTC will release the results of its multi-year examination of patent assertion entities (PAEs). Using its Section 6(b) compulsory process authority, the FTC has been collecting information related to PAEs, which the agency defines as companies that are in the business of buying and asserting patents. The FTC intends to use this information to publish a study that will examine how PAEs conduct business and to develop a better understanding of how their activities affect innovation and competition. FTC officials have suggested that the study results could help inform public policy decisions with respect to PAEs and intellectual property issues and pointed to Congressional interest as part of the justification for the study.

The FTC study will provide some potentially useful data with respect to PAE activity. But any efforts by the FTC or others to base policy decisions, including law enforcement priorities, principally on the study results would be seriously misguided. To understand why requires a basic understanding of statistical methods.