FTC Planning To Go After Patent Trolls

from the this-ought-to-get-interesting dept

Well, well, look at this. Just yesterday we wrote about how the Supreme Court said this week that patent holders can’t use their patents as a get-out-of-jail-free card when facing antitrust investigations from the FTC. While many had focused on the specific pay-for-delay situation in the case, we wondered if this would unleash the FTC to really go after a whole variety of patent trolls. The FTC has been gearing up to go after patent trolls for quite some time, and now it looks like it’s finally happening.

The FTC is launching a “sweeping investigation” of patent trolls that will hopefully expose some of the more nefarious practices of those shakedown houses:

The chairwoman, Edith Ramirez, is planning to ask the full commission to approve an inquiry that will include the issuance of subpoenas to companies that are known as patent-assertion entities, or, unflatteringly, as patent trolls. The move comes after the issuance of several executive orders by President Obama directing executive agencies to take steps to “protect innovators from frivolous litigation.”

If approved, which is likely, the F.T.C. investigation will require patent-assertion companies to answer questions about how they conduct their operations, including whether they coordinate their lawsuits with other patent holders and if they funnel proceeds from lawsuits and patent licenses back to the original patent owner.

Also, the NY Times article notes that the FTC isn’t just focusing on the tiny shell companies, but the big patent trolls as well:

People briefed on the plans said that the inquiry will focus on companies at both ends of the patent-troll spectrum. At one end are the small companies, essentially legal shells, which gather patents and cite them when sending demand letters to thousands of businesses claiming infringement on a patent for some activity. In 2011, a company targeted coffee shops for setting up Wi-Fi networks for customers.

At the other end are large companies like Mosaid, which has its American headquarters in Plano, Tex., and Intellectual Ventures, a Bellevue, Wash., firm that was co-founded by Nathan Myhrvold, a former chief technology officer at Microsoft. Those entities buy portfolios of intellectual property rights from technology innovators like Microsoft and Nokia and use them to generate millions of dollars in licensing payments.

Stay tuned, because this is going to get interesting.

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Companies: intellectual ventures

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Comments on “FTC Planning To Go After Patent Trolls”

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14 Comments
Anon E. Mous (profile) says:

It really is time for this to occur, the fact that you have cases like SCO vs. IBM that have clogged the court for years and keep on clogging up the court is beyond ridiculous.

It seems it now isn’t about invention and buying patents to make your product better, it is more off add to your patents to game you chances in settlements with threat of a lawsuit.

While this is a great step there are a lot else that could be done to alleviate the plaque of patent trolls. The patent office needs to be cleaned up and the rules and regs on patent approval need to be revamped.

Otherwise there are far too many shady lawyers and companies who will keep gaming the system to achieve large settlements while abusing the patent system.

Anonymous Coward says:

Re: Re:

I think the reason it stops there is because there are legitimate uses for a patent aggregator company. (basically, if patent trolls actually passed the money on to the patent holders, then they could have use in reducing patent thickets. how? simple- something along the lines of standards-required licenses- one license (at a reasonable cost covering ALL licenses in the thicket. Set the fee at something like 10% of net profits from the device, and everyone’s happy.))

Anonymous Coward says:

Re: Re: Re:

“there are legitimate uses for a patent aggregator company”

Hog wash.

“if patent trolls actually passed the money on to the patent holders”

Are you implying the trolls do not own the patents they are threatening others with? This might put them in a less than legal position – no? Even if this were legal, how exactly would it reduce anything other than consumer bank accounts?

“10% of net profits from the device”

You are demented, seek help.

btw, I think you misspelled aggressor.

Mark Syman (profile) says:

Re: Landlords

No one likes landlords (especially tenants !) but please explain how a landlord is different than a patent enforcer?

The landlord buys property and rents it out, just like a patent enforcer buys property and rents it out. If the landlord finds a squatter, the landlord tells the squatter they must pay, even if the squatter didn’t know that anyone owned the property.

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