Report shows ‘dramatic’ drop in US patent litigation
Accountancy firm PwC has published a report that shows there was a 13% drop in patent lawsuits filed in the US last year, a trend that it has described as a “dramatic shift” in the patent landscape.
The total number of cases filed in 2014 was approximately 5,700, which is a 13% drop from the 6,500 cases filed in 2013, according to PwC’s “2015 Patent Litigation Study: A Change in Patentee Fortunes” report published yesterday (May 20).
PwC has said the decrease may have been down to the ruling by the US Supreme Court in the Alice v CLS Bank case, which it said has “raised the bar for patentability and enforcement of software patents”.
In addition to the increased restrictions on what is patent eligible, PwC said the drop was also a result of a “higher likelihood of the losing plaintiff having to reimburse defendant’s costs” in the wake of Alice.
“The decline in the number of patent cases filed is likely driven by various factors, the primary one being the Supreme Court’s June decision in Alice v CLS Bank, which significantly impacted the ability to obtain and assert software patents,” the report stated.
It was the first time there has been a recorded drop in patent lawsuits filed since 2009.
But the report identified concerns about litigation from non-practising entities (NPEs), sometimes referred to as ‘patent trolls’.
The report stated that the average amount in damages awarded to NPEs is more than four times higher than damages awarded to practicing entities and that just five of the 94 district courts in the US heard 42% of all lawsuits involving NPEs.
Those courts were: the US District Court for the Eastern District of Texas; the US District Court for the Northern District of Illinois; the US District Court for the Southern District of New York; the US District Court for the Northern District of California and the US District Court for the District of Delaware.
The report said that NPEs were successful in 49% of claims asserted at the Texas court, with the Delaware court yielding a 35% success rate.
“Cases with NPEs as patent owners were concentrated in a few districts ... The percentage of NPE favourable decisions in the most active NPE districts continues to increase, indicating continued concentration of NPE cases in certain courts,” the report concluded.
