New study shows ‘dynamic’ patent litigation environment

By Jessica M. Karmasek | Apr 2, 2015

MENLO PARK, Calif. (Legal Newsline) - The number of new patent litigation filings in federal district court dipped in the second half of 2014, according to a recent survey.

California-based Lex Machina, a now-private company initially set up by experts at Stanford University’s computer science department and law school, released its second annual Patent Litigation Year in Review report last week.


According to the report, in 2014 not only did district court filings start to wane, but also Patent Trial and Appeal Board activity swung upward.


“Our findings show a remarkably dynamic patent litigation environment,” said Josh Becker, CEO of Lex Machina.


Becker said the report, which provides insights about judges, districts, parties, law firms and patents, and highlights trends and developments in patent litigation, is needed because of the lack of reliable, unbiased data.


“Our 2014 Patent Litigation Year in Review builds on last year’s inaugural report to reveal the most meaningful trends attorneys need to know about in order to maximize their chances of success in the months ahead,” he said.


The report was released amid discussions on Capitol Hill over patent reform.


Lawmakers have declared reform a priority this session, after the U.S. Supreme Court last year weighed in on a record total of six patent cases, including, for the first time, the issue of attorneys’ fees and its first decision in more than 30 years on computer-based patentable subject matter.


“As companies of all sizes increasingly recognize the importance of patents and intellectual property in driving growth, understanding the data behind business litigation has become indispensable to properly assessing strategic opportunities and risk, and budgeting accordingly,” Becker said.


Lex Machina combined data from PACER, an online service that provides access to federal court documents; the PTAB; the U.S. International Trade Commision; Orange Book ANDA applications; and other sources to create “structured, unbiased data sets.”


Notable highlights from this year’s report include:


* Although the U.S. District Court for the Eastern District of Texas and the District of Delaware remain the most popular courts for new patent cases, both saw a net decrease from last year – a 4.9 percent drop for Eastern Texas and a 41.2 percent decline in Delaware;


* Judge Rodney Gilstrap (Eastern District of Texas) had 982 new cases in 2014, the most of any district court judge. Judges Sue Robinson (District of Delaware), Leonard Davis (Eastern District of Texas) and Richard Andrews (District of Delaware) led in dispositive summary judgments;


* A large number of cases by eDekka and Olivistar placed them at the top of the plaintiffs list, while Apple remained the top defendant; and


* Damages awarded in 2014 included approximately $1.8 billion total in compensatory damages, with another $313 million total in enhanced damages. The Eastern District of Texas tended to award more damages than other districts, regardless of whether measured by ratio of damages awarded to cases filed, or simply by median damages, the report found.


Beth Provenzano, of the United for Patent Reform coalition, argues that the report paints a picture of a patent litigation system “urgently in need of legislative reform.”


“The data finds that patent trolls continue to sue productive businesses at a historic rate,” she said.


“The majority of victims are small businesses that patent trolls target because they can least afford to fight back. Patent trolls are looking for quick settlements and know small businesses are more likely to accept those.”


Provenzano said Congress must put a stop to the so-called “trolls,” and pass a strong patent litigation reform bill sooner rather than later.


“The Supreme Court cannot fix the patent system on its own,” she said, referring to the court’s rulings last year. “Our representatives in Congress need to pass legislation to end the abuse of the patent system now.”


To receive and view the full 2014 report, register here.


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

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