Patent Law

Antitrust Enforcers to Consider Whether Patent Trolls Disrupt Competition

Antitrust regulators have scheduled informal hearings next month to consider whether patent trolls are disrupting competition and stifling innovation.

The Justice Department and the Federal Trade Commission have invited technology companies and at least one patent holding company to participate, the Wall Street Journal reports. The holding companies, known as patent trolls, collect patents but don’t make products.

According to the story, the hearings will probe how patents are being used “as strategic weapons,” especially when claims are made based on patents that are part of industry technology standards. Antitrust regulators are also interested in:

•The transfer of patents as a result of mergers or buyouts.

• The formation of a single patent holding company by two or more tech companies. In a speech in September, Justice Department economist Fiona Scott Morton expressed concerns with such arrangements. Companies that should be competing “instead are cooperating, through the troll, to raise rivals’ costs and share the profits from doing so,” she said.

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