Federal Trade Commission Votes to Conduct Study on Patent Assertion Entities
Client Alert | 2 min read | 09.27.13
The FTC announced on September 27 that after a unanimous vote, the Commissioners have decided to launch a study of patent assertion entities (PAEs) and their effect on innovation and competition. The agency has long indicated interest in this issue. The study, which will be conducted pursuant to Section 6(b) of the FTC Act, will allow the FTC to issue compulsory process orders to gather information from PAEs, as well as from other companies that operate in the wireless communications sector.
PAEs have lately garnered scrutiny from the Obama Administration, Congress, and private litigants, as described in more depth here. Their effect on competition and innovation is, however, difficult to measure, because details about licensing transactions are often confidential. But the Commission has the authority to collect non-public information, such as licensing agreements and cost and revenue data. As a result, the study is expected to generate a much richer set of data from which the Commission will be able to draw conclusions. According to the Commission's announcement, the study will target specific issues, including (1) the corporate structure of PAEs; (2) the type of patents held by PAEs; (3) the licensing and litigation conduct of PAEs; and (4) the operating costs and revenues of PAEs.
While the Commission has emphasized on various occasions that it has not yet drawn any conclusions about whether PAEs have a negative effect on competition and innovation, a 6(b) study has the potential to result in enforcement actions in the future. For example, the Commission's position against reverse payment settlements in the pharmaceutical industry was solidified after it conducted a 6(b) study on that subject from 2000 through 2002.
The FTC has issued a public call for comments on proposed information requests to PAEs, and it will accept such comments for 60 days, at this address. Upon expiration of the comment period, the FTC will seek clearance from the Office of Management and Budget to commence issuing compulsory process orders.
Contacts
Insights
Client Alert | 8 min read | 06.30.25
AI Companies Prevail in Path-Breaking Decisions on Fair Use
Last week, artificial intelligence companies won two significant copyright infringement lawsuits brought by copyright holders, marking an important milestone in the development of the law around AI. These decisions – Bartz v. Anthropic and Kadrey v. Meta (decided on June 23 and 25, 2025, respectively), along with a February 2025 decision in Thomson Reuters v. ROSS Intelligence – suggest that AI companies have plausible defenses to the intellectual property claims that have dogged them since generative AI technologies became widely available several years ago. Whether AI companies can, in all cases, successfully assert that their use of copyrighted content is “fair” will depend on their circumstances and further development of the law by the courts and Congress.
Client Alert | 3 min read | 06.30.25
Client Alert | 3 min read | 06.26.25
FDA Targets Gene Editing Clinical Trials in China and other “Hostile Countries”
Client Alert | 3 min read | 06.26.25
