In the second of this two part series, we dig a bit deeper on the FTC’s recently proposed study on patent assertion entity (PAE) activity. In Part 1, we covered some background on PAEs and why they are singled out separately from other types of patent holders. Here in part 2, we discuss potential antitrust concerns with PAE activity, what information the FTC is seeking from PAEs and others, and — importantly — what the study means for you.
Potential antitrust issues
To place into context the entire concern with PAEs, as well as to better understand why the Federal Trade Commission is seeking the type of information it is requesting, we delineate briefly the potential antitrust concerns with PAE activity. It must be understood that a valid patent holder unquestionably has the right to exercise his/her patent, or to sit back and sue for infringement should another entity utilize the patent without permission. The mere assertion or enforcement of a PAE patent cannot, without more, constitute an antitrust violation. Nevertheless, a number of different antitrust concerns are implicated with PAE activity, the most prominent of which are presented below.
1. Acquisition and licensing of patents
A patent is an asset and, like any other asset, the more one acquires within a given market, the greater the concern that the acquirer will eventually garner market power and the ability to price its products/services above competitive levels. Or, in the patent context, license the patents above competitive levels. Though not …