The FTC PAE Study: A Cautionary Tale About Making Unsupported Policy Recommendations
Public Domain, ABA Antitrust Section Newsletter of the Intellectual Property Committee, Forthcoming
14 Pages Posted: 10 Nov 2016
Date Written: November 9, 2016
In October 2016, the Federal Trade Commission released its long awaited case study examining the business practices of 22 Patent Assertion Entities (PAEs). One clear policy implication is that PAEs do not present an antitrust problem. While the study makes a number of interesting and potentially important factual findings, it makes four policy recommendations that simply are not substantiated by anything in the study. The FTC acknowledged that the limitations of its sample rendered it inappropriate to extrapolate its findings to PAEs as a whole. Curiously, however, in spite of that acknowledgement, FTC went on to make recommendations applicable to the entire population of PAEs. Because it is unclear whether the policy recommendations in the FTC’s PAE study would survive a cost-benefit test, and because they certainly cannot be substantiated based upon the PAE Study alone, we conclude the policy recommendations should be afforded little weight.
Keywords: patent assertion entities, non-practicing entities, trolls, Federal Trade Commission, patents, intellectual property, antitrust, economics
JEL Classification: K21
Suggested Citation: Suggested Citation