The Federal Trade Commission (FTC) announced yesterday that it will be opening an investigation into the growing problem of law firms known as “Patent Trolls”.
The media has been paying particular attention to these firms recently. Known for hustling settlements out of would-be inventors, the FTC will be pursuing these entities to evaluate whether they stifle growth and innovation.
According to the New York Times, the FTC Chairwoman, Edith Ramirez, is pushing for the Commission to pursue these firms, launching what is known as a “6(b)” study. The 6(b) study is highly effective at affecting the situations and occurrences they are brought to bear upon. Recently, the Supreme Court decided that pharmaceutical companies couldn’t pay generic drug manufacturers to not produce drugs once patents on the drugs expired, known as “pay for delay.” The practice had previously been the subject of a 6(b) investigation.
What the FTC is responding to is the growing concern that a recent trend in technology and patent law is terribly detrimental to the creative and productive environment that the protections of patents were intended to ensure. Now, unscrupulous teams of attorneys are being called to task for having carefully calibrated the cost of fighting a lawsuit against the cost of settling one, encouraging those they accuse of violating a patent to just pay them what they’ve asked because fighting them, taking them to court, will cost just a bit more – and there’s always the chance they’ll win.
Arming themselves with vast libraries of broad and vaguely-worded patents that, in many instances, more or less would describe the creation of almost every technological or online achievement from the last five years, these firms set out to squeeze newcomers and discourage competition.
Will the FTC’s added attention, the new investigation, eventually have a similar effect as it has on the “pay to delay” practices? Given the speed at which technological innovation is occurring today, the death of this retarding practice could not come soon enough; so, hopefully.
Joshua is a writer and researcher with Ring of Fire.