President Barack Obama made it clear earlier this month that he wants to investigate the practices of patent-holding firms. Now, it looks like the Federal Trade Commission is taking action.
The New York Times reports that the F.T.C. is planning to announce an investigation of the “patent trolls,” that will require companies to answer questions about the legitimacy of their business.
Bellevue-based Intellectual Ventures, which the NYT mentions in its article, is one of the biggest patent holding companies and will surely be investigated. The patent holding firm, which is owned by former Microsoft CTO Nathan Myhrvold, has come under scrutiny recently for its practices following a This American Life report investigating the company’s actions.
Intellectual Ventures has acquired more than 70,000 patents during its 13-year history, and has earned more than $3 billion by licensing those patents to other companies who ”use them to make computer equipment, software, semiconductor devices, and a host of other products,” the company said in legal documents.
But the firm, which has yet to produce a blockbuster commercial success of its own, has become quite litigious in recent years. It has sued companies such as Toshiba, Canon, Symantec, AT&T, CenturyLink, Windstream, and most recently it took its patent fights to banks like Capital One, First National Bank of Omaha and PNC.
Patent trolls — also known as Patent Assertion Entities — were responsible for 62 percent of all patent infringement suits in the U.S. last year, according to a report from the National Economic Council and the Council of Economic Advisers. The number of suits stood at mind-blowing 2,500 last year. That’s up from 1,500 suits in 2011, or 45 percent of the total. Compare that to 2006 when they were responsible for just 19 percent.
Previously on GeekWire: This chart shows what’s royally messed up in the U.S. patent system