This is the third in a series of posts discussing the 2015 Update to the data in my forthcoming article, IP Litigation in United States District Courts: 1994 to 2014 (Iowa Law Review, forthcoming 2016). You can read the 2015 Update in serial form in the posts that follow, or you can download the entire update as a pdf file from ssrn.com. See Suggested citation, Matthew Sag, IP Litigation in United States District Courts—2015 Update (January 5, 2016). Available at SSRN: http://ssrn.com/abstract=2711326.
The previous post discussed new data on copyright litigation and the John Doe phenomenon, this post examines recent trends in patent litigation and the true nature of the patent litigation explosion.
3. Patent Litigation
As I explained in IP Litigation in United States District Courts: 1994 to 2014, the filing data gives a misleading impression of the true extent of patent litigation because the rules relating to joinder changed in 2011 with the passage of the America Invents Act. At first glance, it looks as though there was an enormous spike in patent litigation between 2010 and 2012; however, this spike is at least partly attributable to an important procedural change brought about by the AIA. Prior to the AIA, it was common for patent plaintiffs to join multiple unrelated defendants in a single lawsuit based on a commonly-asserted patent or patents. The AIA ended this ruse and resulted in a nominal explosion of patent infringement lawsuits. Figure 4 (below) shows the number of cases filed in each year from 1994 2015 (see the gray bars) but it also shows the estimated number of defendants for each year. Essentially, prior to the America Invents Act of 2011, the true extent of litigation was disguised through permissive joinder of unrelated (or tenuously related) parties. This practice was particularly common in the Eastern District of Texas, the patent troll’s favorite hunting ground (see Figure 5 (below)). Note that although the trend in patent case filings is more or less flat between 2012 and 2015, the number of patent defendants has sharply declined over the same period.
Figure 4 Patent Cases Filed and Estimated Number of Defendants, 1994—2015
Source: Bloomberg Law, 1994–2015. Bar chart depicts cases filed. Scatterplot depicts estimated number of defendants. Quadratic fit lines from 1994 to 2010 and 2012 to 2015 are drawn for illustrative purposes.
The data underlying Figure 4 is also presented in tabular form below.
Table 4 Patent Defendants 1994—2015
Figure 5 Average Number of Patent Defendants per Filing 1994–2015
Source: Bloomberg Law, 1994–2015.
Figure 5 (above) shows the estimated number of defendants per suit for the nine most popular federal districts from 1994 to 2015 and also for an aggregation of all other districts. The vertical dashed line is set to 2011 to mark the passage of the AIA. It is starkly apparent that the trend toward more defendants was driven by the Eastern District of Texas. The estimated number of defendants in Eastern District of Texas climbed steeply from 1.66 in 1994 to 12.37 in 2010 and then dropped precipitously down to 1.99 in 2014. It has fallen further in 2015, to 1.90 defendants per suit.
End of post.