What is Causing the Rise in Patent Infringement Litigation?


Gene QuinnOver the past week or so, there have been a series of articles on IPWatchdog.com that have taken a look at the rise of patent litigation beginning in about 2009, but really with an alarming growth in the number of patent infringement lawsuits brought in 2012. The first article in what is now a trilogy (and likely will be more) is The Rise of Patent Litigation in America: 1980 to 2012. The chart below sets the table.

But why would there be such an enormous growth in patent litigation over the past few years, and a rise of more than 25% between FY 2011 and FY 2012?

The rise in the number of patents issued certainly has something to do with this, but probably less than you might expect. The number of patents issued has been rising for decades, and would likely account for the growth in the number of patent infringement lawsuits between 1980 and 2008, given that the slope of the upward trajectory roughly matches in both the above and below graphs.

Ron Katznelson published his thoughts on the matter, suggesting that the American Invents Act is the major cause for the rise in patent infringement lawsuits. Katznelson cites the fact that, in FY 2009, the typical patent enforced via litigation was between 1 to 5 years old, but in FY 2012, the typical patent enforced was less than 1 year old. First, he points out that the AIA makes it harder to bring lawsuits with multiple defendants (i.e., the joinder provisions). Second, the AIA also provides that, if a patentee files suit for infringement within 3 months of the patent issuance, the court may not stay a motion for preliminary injunction on the basis of a post-grant review.

Additionally, pursuant to 37 CFR 42.101, an inter partes review cannot be filed more than one year after the date on which a defendant is served with a complaint alleging infringement of the patent. So a quick filing starts the 1-year inter partes review countdown. I wonder how much that influences the decision as well?

A new study by Professor Robin Feldman at UC Hastings Law School also finds that 58% of new patent infringement lawsuits are brought by patent monetizers. See Patent Monetization Entities Filed 58% of Lawsuits in 2012.

In his article, Katznelson questions whether the rise of patent litigation can be attributed to patent monetizers, although not directly challenging Professor Feldman. He points out that “NPE’s mostly acquire older patents,” which to me seems true. If Katznelson is correct, and more than 14% of patent litigations filed in FY 2012 related to patents less than 1 year old, the increase in patent litigation doesn’t seem tied to monetizers, who in many cases partner with the original innovators, as does Acacia Research.

What this suggests is that there is still a lot to understand and anyone jumping to the conclusion that the patent system is broken as a result of the rise in patent litigation is doing so without all the information and hardly a sense of the complicated structure of the overall patent system. It seems the incentives Congress has interjected into the Patent Act thanks to the AIA virtually ensured a rise in patent litigation, thus the system is not broken. It is working exactly as it was designed to work.

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