Innovation Asset Blog

FTC launching patent litigation probe

At a patent and antitrust seminar held in New York last week, Federal Trade Commission chairwoman Edith Ramirez announced that her agency would be launching a comprehensive investigation into the recent spike in patent litigation rates in an effort to gather much-needed practical evidence concerning the commercial consequences of such activity.

"For the FTC to roll up its sleeves and study what the real problems are in a rational way is going to be helpful," California-based patent attorney William Rooklidge told The New York Times.

Although non-practicing entities, or patent holders who have no discernable intention of manufacturing or marketing their inventions, attract the majority of media attention in this sphere, Ramirez may be more concerned with companies that employ a hybrid version of this strategy. According to the news outlet, these so-called privateering practices involve operating companies selling their assets to non-practicing entities under a tacit agreement that they will be used for litigious purposes against a rival of the original patent owner.

Anti-competitive patent strategies of all kinds have been on the radar of government agencies and executives lately, particularly as the Obama administration continues to underscore the macroeconomic significance of having an equitable system which appropriately incentivizes true innovation. The FTC initiative could be a crucial source of objective data from which more informed policy decisions can be made.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.