Patent Aggregation: Models, Harms, and the Limited Role of Antitrust

Abstract

Practicing and non-practicing entities alike are aggregating enormous portfolios of patents. In July 2011 a consortium of technology companies including Apple, Microsoft, Sony, and RIM outbid Google for Nortel Networks’ portfolio of 6,000 patents for $4.5 billion. One month later, Google bought Motorola along with its 17,000 patents and 7,500 pending patent applications. Intellectual Ventures, a patent asserting NPE, has accumulated more than 70,000 patents. This Note first explores how the patent universe currently facilitates and encourages patent aggregation. It then describes the different aggregation models and strategies that practicing entities and NPEs use for defense or to generate revenue, and considers the harms and benefits that those activities impose on innovation and competition. Finally, the Note analyzes how antitrust law might address the harms associated with patent aggregation. It concludes that although antitrust may address some anticompetitive activity, many antitrust-based solutions would chill both beneficial and harmful activity, and are thus unlikely to be adopted in ways that could cure deeper problems in the patent system related to aggregation.