Mossoff Comments NY Times on FTC Plans to Investigate Patent Assertion Entities

Professor Adam Mossoff comments in a New York Times article outlining the Federal Trade Commission (FTC) plan to use its subpoena power to investigate businesses whose primary purpose is to stockpile patents and use them to sue other companies.

The FTC's actions could ultimately result in antitrust enforcements and provide momentum for the tightening of restrictions on such lawsuits, as the effort is intended to document the costs and benefits of a rising tide of patent litigation.

The article states that some patent experts have expressed concern that the FTC effort may be nothing more than a fishing expedition designed to look for problems the FTC has presumed exist.

"At the end of the day, these are licensing companies that are practicing their property rights, much as a landlord is practicing his property rights by leasing a house," Mossoff says, adding that he prefers to call these types of companies what he views them to be—patent licensing companies.

F.T.C. Votes for Inquiry Into Patent Businesses, The New York Times, September 27, 2013. By Edward Wyatt.

"In 2011, Congress completed an effort that was supposed to be an overhaul of the patent system. But among its features was a provision that said a company could not file a patent infringement lawsuit again multiple companies in a single court action; rather, it had to file the cases separately. The idea was that frivolous lawsuits would diminish because of the cost of filing more cases.

"Instead, the number of patent cases soared. In part, that reflects the fact that a company will often find it more economical to pay to settle a case rather than pay to defend itself."

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