NPEs Continue to Play Large Role in Patent Litigation

by Foley & Lardner LLP
Contact

The annual patent litigation study recently released by PricewaterhouseCoopers LLP (PwC) sets forth some interesting trends in patent litigation, including that cases involving non-practicing entities (NPEs) continue to account for a large and increasing amount of patent cases. This may bolster recent calls by some to curb abusive patent litigation, which many largely attribute to certain types of cases involving NPEs. In 2013, cases involving NPEs accounted for the majority of new patent infringement cases, continued to be concentrated in a relatively small number of districts, and had higher damages awards even though damages overall are decreasing in patent litigation.

According to the report, the number of patent infringement cases increased by 25% in 2013 to a record filing of 6,500 new cases. NPEs accounted for 67% of these filings, compared to only 28% in 2009. However, only 20% of decisions issued in 2013 involved NPEs, which may reflect a tendency for these cases to settle or be dismissed prior to trial, summary judgment, or other dispositive rulings.

These cases were concentrated in several districts; five district courts accounted for 41% of all decisions involving NPEs. Notably, the Eastern District of Texas rendered 12% of those decisions. The Eastern District of Texas also had one of the highest NPE success rates (46%). Other jurisdictions with a high number of NPE decisions included the Northern District of Illinois, Southern District of New York, Northern District of California, and the District of Delaware.

Although median damages awards are decreasing overall in patent litigation, damages awarded to NPEs are increasing. Over the last four years, NPEs were awarded damages averaging more than three times the damages awarded to practicing entities. Median damages for for-profit NPEs were slightly higher than awards for non-profit NPEs (such as universities). Awards to individuals who asserted, but did not practice, patents were significantly lower than those to both for-profit and non-profit NPEs

In addition to these statistics, the study also included some interesting statistics regarding patent litigation in general, although no doubt influenced by NPE litigation. In terms of favorability to patent holders, the top four districts remain the same compared to prior years: Eastern District of Virginia, District of Delaware, Eastern District of Texas, and Western District of Wisconsin. However, the fifth spot in the rankings went to a new district, the Middle District of Florida. Although the Middle District of Florida had the lowest amount of damages awarded ($322,927), it averaged a relatively fast time to trial (1.80 years) and a high success rate for patent holders (54%).

The judges with the highest number of patent cases on their dockets included Judge Sue Robinson (Del.), Judge Gregory Sleet (Del.), Judge Leonard Davis (E.D. Tex.), and Judge Leonard Stark (Del.). These judges also yielded damages awards significantly higher than the median. Judge Robinson and Judge Stark recently released new guidelines and procedures for patent litigation, likely due to the high volume of patent cases on their dockets.

The study also looked at trends in certain industries and found that the consumer products industry had the largest percentage of patent decisions. Additionally, patent holders in the consumer products, biotechnology/pharmaceutical, medical devices, and computer hardware/electronics industries had higher success rates than the overall median. The telecommunications industry, in particular, had the highest median damages award at $22 million.

New to the study this year were statistics related to appeals of cases to the Federal Circuit. The study found that 71% of district court cases were appealed, and 76% of those decisions were modified in some way.

Finally, the study found that the number of issued patents continued to grow, with 300,000 patents granted in 2013. This continues the trend of high correlation between the number of patent cases filed and the number of patents granted by the United States Patent and Trademark Office. For more detail, the full report of the study can be found here.

Although many of these statistics may come as no surprise to practitioners, these statistics do provide a clearer picture of the role of NPEs in the changing landscape of patent litigation. With more cases filed by NPEs each year and the increasing amount of damages awarded to NPEs, these findings will likely influence litigation strategy depending on the parties, the jurisdiction, and potential damages involved. The continued upward trend in NPE cases may also provide additional support for recent and forthcoming efforts to introduce new legislation aimed at curbing abusive patent litigation.

View This Blog

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley & Lardner LLP | Attorney Advertising

Written by:

Foley & Lardner LLP
Contact
more
less

Foley & Lardner LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.