FTC Chief Ramirez Calls on Agency to Probe Patent Trolls

U.S. Federal Trade Commission Chairwoman Edith Ramirez said the agency should conduct a broad probe of patent-assertion entities, known as “patent trolls” to those who accuse them of abusing the system.

Ramirez today said she would like to see a full-fledged inquiry to determine whether the entities’ activities hamper or encourage innovation and competition. President Barack Obama earlier this month announced a crackdown on patent litigation in an effort to protect technology, finance and retail companies from lawsuits and demands for fees.

The crackdown includes five executive actions and seven recommendations that require congressional action. A White House commission report said more than 100,000 companies were threatened with infringement last year by patent-assertion entities, whose sole business is to obtain patents and use them to extract royalties from other businesses.

The entities are “driving the increase in patent litigation and targeting firms in a growing slice of the economy,” Ramirez said today at a workshop sponsored by the Washington-based American Antitrust Institute and the Computer and Communications Industry Association, a trade group whose members include Google Inc. and Microsoft Corp. “The costs to consumers from PAE activity appear increasingly tangible and direct.”

Growing Drain

Abusive patent lawsuits are a growing drain on companies and the courts, though not all businesses that own patents without making products are “trolls,” according to a report released June 4 by the White House Council of Economic Advisers, the National Economic Council and the Office of Science and Technology Policy.

The FTC and the antitrust division of the U.S. Justice Department conducted a joint workshop on patent assertion entities in December.

Ramirez said today that antitrust enforcers “have a role to play in advancing a greater understanding of the impact of PAE activity and using our enforcement authority, where appropriate, to curb anticompetitive and deceptive conduct.”

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