FTC Proposes Study Of Patent Assertion Entity Activities, Holdings, And Structure

On September 27, the Federal Trade Commission ("FTC") announced a proposal to use its authority under Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b), to issue compulsory process orders requesting detailed information about the makeup and patent assertion practices of approximately 25 Patent Assertion Entities ("PAEs") and approximately 15 other companies in the wireless communication sector. Specific companies were not identified.

The FTC defined "PAEs" as "firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technology," a definition intended to exclude "other non-practicing entities or NPEs that primarily seek to develop and transfer technology, such as universities, research entities, and design firms."