George Mason Law Review: Taming the Trolls

Why Antitrust Is Not a Viable Solution for Stopping Patent Assertion Entities | October.06.2014

In the most recent edition of the George Mason Law Review, partner John "Jay" Jurata co-authored an article titled, "Taming the Trolls: Why Antitrust is Not a Viable Solution for Stopping Patent Assertion Entities."

Certain operating companies, including Google Inc., as well as consumer protection advocates, trade organizations, academics, and antitrust enforcement agencies, have suggested that antitrust law may offer a solution to concerns over PAE behavior. These arguments, taken together with the FTC’s continued interest in the effects of PAE assertion activity, beg the question: is antitrust enforcement a viable solution for patent assertion entities? Some have suggested yes. Proponents of antitrust enforcement solutions argue that PAE behavior raises antitrust policy concerns because it results in patent holdup, raised rivals’ costs, exclusion of companies from markets, and/or harms to innovation. But few specifics have been offered to back up these various theories.

This Article seeks to apply a disciplined antitrust analysis to these theories. This Article undertakes a traditional antitrust analysis under Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act to assess PAE conduct. The analysis examines whether the alleged harms associated with PAE behavior are harms to competition or the competitive process—a necessary element for antitrust liability. Ultimately, this Article concludes that, outside limited scenarios, antitrust laws are not a solution to the problematic aspects of PAE behavior.