Study by pro-reform group predicts record-setting year for patent infringement lawsuits

By Jessica Karmasek | Jul 9, 2015

SAN JOSE (Legal Newsline) - Data from a group whose self-described goal is “reducing the number of non-practicing entity assertions” shows that the number of patent infringement lawsuits brought by NPEs in 2015 could exceed 6,000 lawsuits.

According to an analysis by San Jose-based Unified Patents, a membership organization created to help companies counter the costs and risks of certain NPE activity, 2015 is on track to likely be the “highest year ever” for infringement lawsuits -- even surpassing 2013’s numbers.

Unified, which publishes monthly newsletters summarizing NPE activity against small businesses and technology companies, found that 3,050 lawsuits were filed in the first six months of this year.

Of those cases, NPEs filed 68 percent of them, or 2,075, according to the data compiled.

“To put these new numbers in perspective, patent lawsuit filings in the first six months of 2015 are up by over 32 percent when compared to the last six months of 2014,” Unified Patents CEO Kevin Jakel said.

“When compared to the same period as last year, patent filings for the first six months of 2015 are up by over 10 percent.”

Unified also noted that 90 percent of all high-tech related – i.e. software, hardware or networking -- patent litigation during the first six months of 2015 was brought by NPEs.

Jakel contends that the data undercuts any assertions that patent lawsuits are on the decline.

“Some have suggested that changes resulting from passage of the (America Invents Act) or as a result of last term’s Supreme Court decisions have led to a reduction in NPE patent litigation,” he said.

“Clearly, that is not the case.”

In May, PricewaterhouseCoopers LLP released its “2015 Patent Litigation Study: A Change in Patentee Fortunes.” The study analyzed patent infringement lawsuits filed in the U.S. from 1995 through 2014.

According to the study, which is in its 10th year, the number of patent lawsuits filed in 2014 decreased by almost 13 percent -- the first year-over-year drop since 2009.

The study’s authors pointed to the U.S. Supreme Court’s decision last year in Alice Corp. v. CLS Bank.

In its June 19, 2014 ruling, the Supreme Court said the claims in Alice were drawn to an abstract idea. Implementing those claims on a computer was not enough to transform the idea to a patentable invention, the justices ruled.

“The Supreme Court decision in Alice was likely responsible for this sharp reversal -- and other patent cases now before the Supreme Court may well further affect litigation trends,” Chris Barry, a PwC Advisory partner focused on forensic services, wrote in a blog post.

Barry, who is a certified public accountant with credentials in financial forensics and has more than 30 years of experience, has worked extensively in the intellectual property field. In fact, he has testified as an expert witness at trials more than 60 times.

According to Unified’s data, filings at the Patent Trial and Appeal Board also were on the rise in the last six months, with 953 petitions filed with the board – a 31 percent over the same period last year, the group found.

The PTAB is an administrative law body of the U.S. Patent and Trademark Office that decides issues of patentability. It was formed in September 2012 as part of the AIA.

Of those petitions filed with the board so far this year, 41.9 percent were filed against NPEs, according to the Unified-compiled data.

Unified said in a statement that it made its “best attempt” to eliminate mistaken, duplicative or changes in venue filings, hence the totals may vary by less than 1 percent compared to other reporting entities.

Filings include those district court and PTAB litigations between Jan. 1 and June 30. Statistics include litigations initiated by NPEs or declaratory judgments initiated by operating companies against NPEs, it said.

“Unified strives to accurately identify NPE through all available means, such as court filings, public documents and product documentation,” the group said of its methodology.

Click here to view all of Unified’s data.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

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