FTC’s Ramirez calls for comprehensive study of patent trolls

“There is mounting evidence that PAE activities may have an adverse impact on competition and consumers. But at this stage, analysis of the costs and benefits of PAE activities is limited,” Ramirez said at an event hosted by the Computer and Communications Industry Association and the American Antitrust Institute. “The commission can contribute to a broad policy response to PAEs by using its Section 6(b) authority to collect more comprehensive information on a variety of PAE business models and the scope of their activities.”

Ramirez, who assumed the top job at the agency in April, also said the FTC would use its authority to shield small businesses from “deceptive PAE practices.”

“We are on the watch for PAEs who target small businesses with false claims made to induce the payment of illegitimate licensing fees,” she said.

As a part of its study, Ramirez is expected to ask the commission to approve issuing subpoenas to patent troll companies, The New York Times reported.

The FTC chief’s move comes a few weeks after the White House unveiled a set of executive actions to clamp down on patent trolls. Congress has also drafted legislation on the matter.

Patent trolls refer to entities that acquire bundles of patents and make money off of them by threatening to sue other companies for infringement. Critics say patent trolls stunt innovation because they go after up-and-coming companies that can’t afford costly court battles and settle instead.

Senate Judiciary Chairman Patrick Leahy (D-Vt.) urged the commission to use its authority to forcefully crack down on patent trolls in a letter sent to Ramirez earlier in the day. Leahy also encouraged the FTC to launch a section on its website where small businesses and other victims of patent trolls can report abuse.

Leahy plans to introduce legislation against patent trolls with his House counterpart Rep. Bob Goodlatte (R-Va.) soon.

“While I continue to work on bipartisan legislation to combat patent trolling, I encourage you to use aggressively the consumer protection and competition laws already in place that will bolster the American economy and ensure the patent laws are used to encourage invention, not to impede innovation,” the Senate Judiciary Chairman writes in the letter.

The National Retail Federation applauded Ramirez’s plan for the commission to extensively study patent trolls, calling them “a drain on the economy.”

“It’s time for Washington to put an end to this abuse of our nation’s laws,” Mallory Duncan, general counsel of the National Retail Federation, said in a statement. “Seeing this issue receive top-level attention from the FTC is a significant development.”