Action on Patent Trolls Must Address ITC Abuse

ITC Working Group Applauds DOJ & FTC for Workshop on PAE Activity

The ITC Working Group, a coalition of companies that includes Ford, Cisco, Apple, Intel and others, applauded the Department of Justice and the Federal Trade Commission for holding today’s joint workshop on Patent Assertion Entity. The ITC Working Group said the event is another step toward highlighting – and ultimately addressing – the damage PAE’s inflict on the economy and on American innovation.

In 2011, the FTC issued a report that directly identified the concern about PAE abuse at the ITC, saying the discrepancy between ITC rules and case law has created “concern that the ITC may attract suits by patentees that are less likely to obtain injunctions in district court, potentially leading to hold-up and the resulting consumer harm…” Additionally, participants in today’s workshop, including Coleen Chien with the University of Santa Clara Law School, have called attention to the significant growth in PAE cases at the ITC – which jumped 400% between 2010 and 2011.

The ITC Working Group is seeking to restore original congressional intent for the ITC – which is now being actively used to take action against the U.S. companies it was created to protect.

“This workshop makes it clear that, despite the best efforts of Congress and the courts, patent trolls continue to have a deeply damaging effect on the U.S. economy and consumers,” said Matt Tanielian, Executive Director of the ITC Working Group. “Nowhere is that more evident than at the ITC, where PAE’s – sometimes foreign-based – are having a field day bringing cases against companies with operations in the U.S. Neither the America Invents Act nor recent court rulings apply at the ITC, making it fertile ground for the exact type of abuse that Congress has sought to eliminate.”

Tanielian continued, “PAE’s have discovered that that the much lower bar for obtaining injunctions at the ITC gives them gives them tremendous leverage to demand outrageous licensing fees. Companies are left with little choice but to give-in to PAE demands, leading to higher costs for consumers and barriers to American innovation. To be effective, any effort to stop the corrosive impact of patent trolls must address ITC abuse.”

Neil Rubin, Senior Vice President of Litigation at Cisco, who will testify at the DOJ/FTC workshop, testified in July on Capitol Hill about the abuse of the ITC by PAE’s, stating:

“Most of [the] reforms and the improvements in case law that resulted from the [America Invents] Act do not apply to the ITC.patent assertion entities who do not develop, do not make, do not sell and import products are now routinely using the ITC to assert their patents against U.S. operating companies, imposing great expense and burden on them and on U.S. consumers. These assertions in the ITC are injuring rather than protecting our domestic economy.”

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