The FTC’s PAE Study Recommendations: Case Not Proven

The Federal Trade Commission (FTC) would be well advised to avoid putting forth patent reform recommendations based on the findings of the recent Patent Assertion Entity (PAE) study. At the very least, it should explicitly weigh the implications of other research, which explores PAE-related efficiencies and considers all the ramifications of patent law changes, before seeking to advance any “PAE reform” recommendations.

While the FTC study may generate interesting information about a handful of firms, it won’t tell us much about how PAEs affect competition and innovation in general.  The study is simply not designed to do this. To the extent patent reform is warranted, it should be considered carefully in a measured fashion, with full consideration given to the costs, benefits, and potential unintended consequences of suggested changes to the patent system.

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