Patent litigation is on the rise nationally, with a record number of cases being filed every year. In 2013, over 6,800 cases were filed in the United States, the highest number ever and about a 10 percent increase from 2012.
In our last IPT News, we noted the dash to the finish between the District of Delaware and the Eastern District of Texas for the highest number of patent cases in 2013. The winner is the Eastern District of Texas, in a tight race that ended with 1,512 filings for the EDTX and 1,329 for Delaware. Those two jurisdictions, which alone account for over 40 percent of all patent cases filed in the US, are favored by plaintiffs for the expectation of high damages awards, high patentee win rates, streamlined discovery and knowledgeable judges.
Although not yet operating on the scale of the EDTX or Delaware, the Southern District of Florida is rising in popularity as a patent jurisdiction. In 2013, the Southern District of Florida became the seventh busiest jurisdiction, trailing EDTX, Delaware, the Central, Northern and Southern Districts of California and the Northern District of Illinois. While most of these districts are well-known patent venues, the Southern District of Florida is new to the party – so new that, since 2009, the district has seen a 400 percent growth in patent cases.
The increase in filings is mostly due to the rising number of patent assertion entities/non-practicing entities (NPEs) filing in this district. Such entities own patents, but do not offer products or services embodying the invention – they make their money by filing patent lawsuits. NPE litigation currently accounts for about 80 percent of the patent litigation in the Southern District of Florida.
Because NPEs are sophisticated plaintiffs when it comes to jurisdiction, the rise of these filings in the Southern District of Florida is no accident. Plaintiffs are filing patent cases in the Southern District of Florida primarily because of the district’s “rocket docket,” emanating from local Rule 16.1(a)(2), which mandates that all civil cases be segregated into three tracks: 1) expedited (allowing for 90-179 days of discovery); 2) standard (180-269 days); and 3) complex (270 to 365 days). Even the most complex case in this district allows for only one year of discovery, and most cases are assigned to the standard track. As a result, the average patent case is scheduled for trial within 16 months of filing, which in most jurisdictions is virtually unheard of. As an illustration, PwC’s 2013 Patent Litigation Study found that the national average time to trial is about 30 months.*
Also speeding such cases ahead is the fact that the Southern District of Florida is one of fourteen participants in the Patent Pilot Program, instituted by Congress in July 2011 so that district court judges could develop expertise and efficiencies in patent cases. Any Southern District of Florida Judge can transfer a patent case to one of the three judges within the district who have volunteered to be part of the Patent Pilot Program. Accordingly, nearly 85 percent of patent cases are now assigned to Judges Donald J. Middlebrooks, Patricia A. Seitz and Michael K. Moore, who are each regularly scheduling trials well within the 16-month average. Judge Middlebrooks is leading the way with a default schedule of 8 months to trial from the timing of his initial case scheduling order.
Additionally, time to trial is short because the Southern District has not adopted local patent rules. The lack of local patent rules favors plaintiffs because there are fewer pretrial impediments to derail a patentee’s case. Typically, local patent rules require specific times for disclosures and claim construction, but in the Southern District of Florida, more than 60 percent of the cases that currently have a pending trial date do not have a Markman hearing scheduled. Southern District judges have indicated their belief that claim constructions can occur during summary judgment or trial and need not extend the pretrial schedule (although separate Markman hearings do occur regularly when requested).
The enduring popularity of patent case filings in the EDTX and Delaware is founded on sophisticated plaintiffs seeking a favorable forum. The same forces are pushing the emergence of Florida as a popular forum. Its ascension into the Top 10 appears to be more than a blip. Those strategizing about forums should be closely tracking the rise of the Southern District of Florida.