To better understand how PAE behavior compares with the behavior of other firms that assert patents, the FTC conducted a case study focused on litigation and licensing activities in the wireless chipset sector. Here, the FTC collected data from eight manufacturing companies and five non-practicing entities (defined as entities who primarily seek to develop and transfer technology) for the 2009 to 2014 time period. While these respondents are a relatively small group of industry participants, the data they provided was extensive. Overall, the data collected pertained to more than 1,700 demands, 650 distinct litigations, and 1,000 patent licenses covering wireless patented technology.
The case study revealed very significant differences in the assertion behavior of Litigation PAEs versus the assertion behavior of manufacturers, non-practicing entities, and Portfolio PAEs. Litigation PAEs were found to file nearly two and a half times more infringement lawsuits than the three other categories of companies combined. And where manufacturers were found to generally enter into licenses with field of use restrictions, cross-licenses, and varied payment terms, Litigation PAEs were found to usually execute licenses that specify lump sum payments and include few restrictions.