How Do You Solve a Problem Like PAEs?


Policy makers in Washington, DC have been hearing about the problems created by patent assertion entities – PAEs or, to some, “patent trolls” – from a number of quarters over the past few years. PAEs are generally entities that acquire patents and patent families in order to enforce them in the marketplace. A critical difference between PAEs and other patent holders is that PAEs don’t generally make or sell products or services of their own, but simply license their patents to others. As a result, they are less susceptible to patent claims asserted by their targets and less concerned about discovery burdens than other parties in patent litigation.

The activities of PAEs have been on the rise over the last few years, with estimated revenues of $29 billion from licensing in 2011, an increase of 400% since 2005, according to FTC Chairman Jon Leibowitz, who gave introductory remarks for a workshop held by the FTC and the Antitrust Division of the Department of Justice in early December 2012.

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