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FTC boss promises probe into patent troll regulation

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The Federal Trade Commission will investigate the activities of patent assertion entities (more commonly known as patent trolls), chairwoman Edith Ramirez promised in a speech on Thursday.

"Flaws in the patent system," Ramirez said, mean that patent trolls now account for over 60 per cent of patent legal cases, and the situation needs an investigation to see if competitiveness and innovation are being harmed, she said at an event hosted by the Computer & Communications Industry Association and American Antitrust Institute

The investigation will be carried out under Section 6(b) of the FTC's charter, which allows for studies into industry matters by the organization. Ramirez said she wants to analysis the costs and benefits of the current patent system, and provide data that will help legislators who choose to deal with the issue.

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) certainly wants just that. On Thursday has sent Ramirez an open letter calling for the agency to "aggressively pursue enforcement actions against patent trolls" on consumer-law grounds, and requesting a website be set up to inform small businesses of their rights against trolling.

"The situation is particularly egregious when a patent owner sends numerous demand letters threatening an infringement action without having made a reasonable inquiry into the claims, and therefore having no actual intent to file a civil action, for which the owner would be subject to sanctions," he wrote. "These letters are simply used to extract unwarranted payments."

Leahy said that he is planning to introduce legislation on the matter later this year, and President Obama has issued executive orders on the issue. Other legislators are also on the case, with the SHIELD Act looking promising in the House of Representatives.

El Reg wonders why the FTC is bothering to perform the study in the first place, however. There's plenty of academic research on the topic, and a cost/benefit analysis will undoubtedly show that trolls are costing businesses a small fortune while contributing nothing to the economy.

It's time to enact laws, not just study the problem. ®

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