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In Case You Hadn’t Heard… Patent Litigation Volume Grows

by Keith Hock

PricewaterhouseCoopers (PwC) recently published its 2012 Patent Litigation Study, based on final decisions (both summary judgment and at trial) from approximately 1,750 patent infringement cases from 1995 to 2011 (the complete study is available here).  If you have not had a chance to review the study, I have summarized some of the more interesting (at least to me) findings below.

  • A record 4,105 patent actions were filed in 2011.  This represents a 22% increase over 2010 – almost four times the average annual growth rate of 6.4% (since 1991).
  • 244,430 patents were issued in 2011 – an increase of 5% over 2010 (but a decrease from the 23% increase in patents issued in 2010).
  • The median damage award fell from $8.7 million during 2001-2005 to $4.0 million during 2006-2011 (all amounts in 2011 dollars, adjusted for inflation).
  • The largest damage award in 2011 was $593 million.  This represented the 4th largest award since 1995 (based on initial awards before any appellate court adjustments and/or settlements).
  • From 2006 to 2011, patent holders prevailed in jury trials 76% of the time while prevailing in bench trials only 59% of the time.  Juries were also more generous – awarding almost 22 times more in damages (a median of $8.7 million for jury awards and $0.4 million for bench awards during this same period).  These statistics probably explain why jury usage increased from 25% of cases in the 1990s to 55% of cases during the 2000s.
  • Reasonable royalty damages are awarded in 82% of cases; lost profits are awarded in only 32% of cases.  This is likely due to that fact that NPEs are typically not able to claim lost profits and some plaintiffs choose to not pursue a lost profit claim because of the additional analysis required to do so.

Although not summarized in this blog post, the report includes additional statistics regarding practicing versus NPE plaintiffs, industries (e.g., telecommunication cases result in the highest median damage awards) and venues (e.g., the Eastern District of Texas has the most NPE cases).

While I do not have any statistics specific to the Ohio market, there appears to be a significant amount of patent litigation locally.  In the six months since I joined GBQ, we have been retained in eight patent cases involving local companies and/or law firms.  Based on the number of additional patents granted last year and the increasing trend in patent case activity, it seems likely that the level of local activity will also continue to increase.

Additional provisions of the America Invents Act (AIA) have recently gone into effect.  How do you think the AIA will affect these trends in patent litigation?  Please share your thoughts in the comment section below.

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