Overall Patent Litigations Are Down, But High Tech NPE Activity Continues
By Christine Kern, contributing writer
A new study by Unified Patents demonstrates that, overall, patent litigations are down for Q3, but 2014 remains on target to be the second most litigious year in history. In fact, total patent litigations are anticipated to top the 5038 litigations in 2012.
“Although patent litigation is down from its levels in 2013, we are still observing historically high numbers for overall patent litigation in 2014,” says Shawn Ambwani, COO of Unified Patents in a press release. “It’s too early to tell what has led the decline since 2013 but it is clear that High Tech is still experiencing significant NPE (non-practicing entity) activity.”
During Q3 2014, the report details, the total number of patent litigations experienced a 23 percent reduction from the second quarter (1473), or a 7 percent decrease from Q1 figures (1269). High-tech litigation constituted 58 percent of all patent litigation filed (655 of 1124), down from the 66 percent in both Q2 2014 (975 of 1467) and Q1 2014 (814 of 1226). As a percentage, litigation from patent trolls — or “non-practicing entities” (NPEs) — appeared to remain surprisingly consistent. Within High Tech, NPE activity made up 85 percent in Q3, 88 percent in Q2, and 82 percent in Q1.
According to ars technica, which has an earlier article on a Lex Machina assessment, connecting the decline to the Alice v. CLS Bank decision from this summer is still premature. Ambwani explains, “We cannot be clear as to the causation, but can make some good guesses, which include Alice and the America Invents Act.”
Both sets of data, from UP and Lex Machina, reflect an April 2014 spike in filings when patent-holding companies apparently were fearful of a patent reform bill being passed that would have backdated some reforms.
Yet not everyone is celebrating the results of the report as a sign of good things to come. “Of course, the patent trolls are trying to use these inaccurate reports to argue that the patent troll problem is essentially solved,” writes Matthew Levy of the Computer and Communications Industry Association. He notes that the overall trend is still up, with only about a 10 percent dip scheduled for the year.
The Coalition for Patent Fairness, a lobbying group whose members include Google and Oracle Corp., said legislation is still needed to curb those letters and reduce lawsuits even further. “None of this discussion of numbers changes the underlying facts that we need major reform of the patent system to change the economic incentives that drive the troll business model,” Matt Tanielian, the group’s executive director, said in a statement, according to Bloomberg Businessweek. “The only way to accomplish such reform is through legislation that addresses the problem from demand letter to discovery to fee shifting.”