The chairwoman of the Federal Trade Commission is expected today to recommend a sweeping investigation of “patent trolls,” companies that buy large portfolios of technology patents and use them to sue software designers and makers of products like smartphones and tablet computers, the New York Times reported today. The chairwoman, Edith Ramirez, is planning to ask the full commission to approve an inquiry that will include the issuance of subpoenas to companies that are known as patent-assertion entities, or, unflatteringly, as “patent trolls.” The move comes after the issuance of several executive orders by President Obama directing executive agencies to take steps to “protect innovators from frivolous litigation.” If approved, which is likely, the FTC investigation will require patent-assertion companies to answer questions about how they conduct their operations, including whether they coordinate their lawsuits with other patent holders and if they funnel proceeds from lawsuits and patent licenses back to the original patent owner. Patent-assertion entities typically have no operations other than collecting royalties on patents. They accounted for more than 60 percent of the roughly 4,000 patent lawsuits filed last year, up from 29 percent two years earlier.
