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Looking at Patent Trolls in the RFID and Wireless Communications Industry

Patent Assertion Entities (PAEs), also known as patent trolls, purchase patents and then attempt to generate revenue by suing entities that use the patented technology. Venture Beat claims that patent trolling is estimated to be a $29 billion industry. This fall the topic of patent trolls in the wireless industry is being examined by two different organizations.

The Federal Trade Commission wants to learn about how PAEs do business and develop a better understanding of how they impact innovation and competition. The FTC recently voted to seek public comments on a proposal to gather information from approximately 25 companies that are in the business of buying and asserting patents. The FTC also plans to send information requests to approximately 15 other entities with patents in the wireless communications sector to understand how PAE behavior compares with patent assertion activity by other patent owners. A list of the 40 firms was not included in the announcement.

In looking at the official notice, titled Federal Register Notice Soliciting Public Comments On Proposed Information Requests To Patent Assertion Entities and Other Entities Asserting Patents In the Wireless Communications Sector, Including Manufacturers and Other Non-Practicing Entities and Organizations Engaged In Licensing, the FTC plans to ask for detailed financial and patent information dating back to 2008. They have provided a range of estimated response times from 90 to 400 hours per company. Public comments about this information request will be collected for the next 60 days.

The MIT Enterprise Forum of Cambridge’s RFID/NFC group is discussing patent trolls at their next meeting on October 21, 2013. The group claims that disagreements about patents directly affect the RFID community. Certain owners of RFID patents have sued technology providers, manufacturers, and retailers for patent infringement. Targets of these lawsuits include Motorola Solutions, Macy’s, American Apparel, Dole Food, Fruit Of The Loom, The Gap, Pepsico, and Amazon. For the time being, these lawsuits have been blamed for stifling major deployments of RFID applications in the United States.

This RFID/NFC Circle Event, titled What To Do About Patent Trolls? will present a panel that includes representatives from the RFID industry, RFID and wireless standards groups, litigators and patent attorneys, and the MIT AutoID Lab. The panel plans to address questions such as:

  • Who owns the roughly 10,000 RFID patents that exist today and for which RFID technologies?
  • How have the patent lawsuits directly affected manufacturers, retailers, and technology providers?
  • Should NPEs be able to bar RFID from a given industry segment through litigation?
  • Should patent owners other than inventors and operating companies be able to enforce patents?
  • Should RFID software applications be patentable?
  • Should business methods be patentable?
  • Are patent laws outdated for the digital age? Is new legislation required? What should be the goals of new legislation?

The MIT event will be a good opportunity for those in the RFID industry to work on a response to the FTC call for comments. It will be interesting to see if any of the entities that the FTC surveys from the wireless communications sector are involved with RFID.



Venture Beat FTC begins investigation into dark, depraved world of patent trolls

FTC Announcement:

FTC Federal Registry Notice:

MIT Enterprise Forum event: