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Ahead of its key study, the FTC seems to have decided that PAEs are "trolls" and that they're "bad"

Bear with me on this one – it’s a little bit convoluted, but it is important …

Last Wednesday, FTC Commissioner Julie Brill took part in a debate at the 2014 International CES,CEA Innovation Policy Summit in Las Vegas entitled  “Patent Litigation Reform: Who Are You Calling a Troll?” It was a session with a number of high-profile speakers, which got a lot of coverage via Twitter, while Brill also made a copy of her opening remarks available. Thus, those of us who were not there got a good idea of what was being said by participants. During the course of the debate, IAM posted a few Tweets on what was happening. One of these was this:

PAEs = trolls says FTC head @JulieBrillFTC http://go.usa.gov/Zdv5 , so showing where agency stands ahead of its "investigation".

This was reTweeted by several others. The following day, Brill posted a Tweet:

Hi @dustinrmoore, @IAM_magazine, & @TheIPHawk - My next two tweets are in response to your comments.

This was followed by:

PAEs raise many complex issues beyond those in Congressional reforms; study will help FTC gain better understanding of broader issues (1/2)

2/2 Once we gather evidence, FTC will consider policy options; meanwhile Congress should act where warranted based on what already known.

It’s good to know that decision-makers follow what you say and think it worthwhile to respond, so we were very grateful (and flattered) that Brill was engaging with us. Having thanked her for doing so, we thought we could not let the opportunity pass, so Tweeted this:

@JulieBrillFTC Your comments in Las Vegas yesterday in which you equated PAEs with trolls seemed to indicate a decided perspective.

To which she replied:

@IAM_magazine Please read or watch my remarks. I did not use "trolls". I used "PAEs".

The problem is that we had read her speech and she did clearly equate PAEs with trolls. It’s there in black and white at the top of the final paragraph on the first page:

So it is only fitting that various aspects of the patent system, including patent assertion entities (or patent trolls, as some call them), have caught our attention.

When we pointed this out to her, Brill did not respond. But there seems to be very little doubt about it. According to the FTC Commissioner, what she would call PAEs are called “trolls” by others. In other words, in her mind – and presumably in the general mind-set of the FTC – PAEs are “trolls”. And that means they are “bad”. Indeed, you only have to read the rest of Brill’s speech to see that view expressed, maybe not in so many words, but certainly in tone.

Remember, now, that this is a government agency which is about to embark on a detailed study on PAEs  “in order to further one of the agency’s key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy”. It is a study which could be highly influential in shaping the political, legislative and judicial debate around how the US patent litigation system should be structured. Thus, what it comes up with matters very much indeed.

At the very least, it is fair to question just how disinterested a position the FTC is going to be taking as it conducts its investigation. On this blog we have already expressed worries that it may have reached a conclusion and is now in search of evidence to back this up. We hope very much that we are wrong, but Brill’s remarks on Wednesday merely serve to confirm that we are right to be extremely concerned.


Joff Wild
IAM Magazine
11 January 2014

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Comments

RE: Ahead of its key study, the FTC seems to have decided that PAEs are "trolls" and that they're "bad"

Slightly off topic but a recent discussion re the proposed Innovation Act with a US patent attorney went as follows:-

European attorney - loser pays, claims of infringement to be better made out, what's not to like?

US attorney - it's just not American

Btw, I think you're being a bit hard on Julie Brill - "or patent trolls as some call them" - is not quite the same as saying "as I call them"

Sarah Dixon, Johnson Matthey plc on 15 Jan 2014 @ 17:08

RE: Ahead of its key study, the FTC seems to have decided that PAEs are "trolls" and that they're "bad"

I think you're jumping to conclusions; as you note, she says"....patent assertion entities (or patent trolls, as some call them)..."

It is a fact that there are many who would refer to any PAE as a "troll", and intend that pejoratively.

So her comment can be interpreted as simply recognizing that fact; in effect, disinterested commentary.

It can also be intepreted, as you have, to indicate some agreement with such sentiment. But that is not the only reasonable possible interpretation.

David Wright, Cypress Semiconductor on 16 Jan 2014 @ 00:07

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