Google, Blackberry, Earthlink and Red Hat recently filed with the Federal Trade Commission their analysis of the anticompetitive effects of patent trolls (a/k/a non-practicing entities) on competition. (Their analysis may be found here.) What is particularly intriguing is their argument that licensing patents to a non-practicing entity stifles competition because the non-practicing entity is not vulnerable to a countersuit in the same way that a practicing entity is. They assert that a non-practicing entity is not as vulnerable as a practicing entity because it is designed to enforce patents and does not need to allocate other resources to defend its rights. Further, because it does not practice the patent, a non-practicing entity is less likely to settle a dispute through a cross-license. They assert that these reduced vulnerabilities found with non-practicing entities may raise market-wide prices, are detrimental to competition, and encourage companies to transfer patent rights to non-practicing entities for enforcement. Accordingly, they have asserted that the Federal Trade Commission should investigate non-practicing entities, how practicing entities transfer patents to non-practicing entities, and the ways that those arrangements may harm competition.