Overview

While the volume of patent litigation in district courts dipped in 2016, the number of PTAB challenges stayed flat, approximately matching the number of petitions seen in 2014 and 2015.  District court litigation was down 24.8% from 2015 and 11.7% from 2014.   Predictably, high-tech patents were the most frequently asserted and challenged, accounting for nearly 60% of all 2016 disputes. NPEs also continue to flood district court and PTAB dockets. They were responsible for approximately 55% of all new cases in 2016, and more than 90% of all cases in high-tech. 

Figure 1: The number of PTAB petitions filed in 2016 was consistent with 2014 and 2015, while the number of patent suits filed in district court declined. 

Figure 2: High Tech patents continue to be the most frequently enforced and challenged. They are the subject of more disputes than all other patents combined.

Figure 3: PTAB remains the most common venue for patent disputes, closely followed by the Eastern District of Texas. The Eastern District of Texas saw more patent disputes than the next four "Top Venues" combined. 

Figure 4: 91.2% of all patent disputes in the Eastern District of Texas in 2016 were brought by Non-Practicing Entities (NPEs), more than PTAB or any other district.

District Court Litigation

Figure 5: Keeping with the trend from 2014 and 2015, patent litigation peaked in Q2 and slightly decreased in the second half of 2016.

Figure 6: Nearly 84% of all NPE litigation involved Patent Assertion Entities (i.e., companies formed for the sole purpose of monetizing acquired patents). 

Figure 7: High-tech companies are the most frequent targets of infringement suits. They represent 60.7% of the accused infringers in all district court litigation.

Figure 8: NPEs predominantly enforce high-tech patents, while disputes between operating companies involve a much more diverse array of technologies.

Figure 9: In 2016, patents owned by operating companies were at issue in only 9.1% of patent disputes in the high-tech sector. By contrast, NPEs were responsible for more than 90% of high-tech litigation.

PTAB Disputes

2016 also marked a significant milestone for Unified Patents. We filed 29 new IPRs against the most prolific NPEs, bringing our all-time total to 60 challenges. Unified Patents was the 5th most frequent petitioner at the PTAB in 2016, and by far the highest third-party entity. We are the only solution that deters NPE activity without incentivizing further litigation. 

Figure 10: The number of new PTAB disputes has remained relatively steady since 2014. 

Figure 11: IPRs continue to be the most popular procedure for patent challenges at the PTAB.

Figure 12: As in previous years, high-tech patents were the most frequently challenged at the PTAB in 2016.

Figure 13: NPEs were the respondent in approximately 65% of all 2016 PTAB petitions challenging high tech patents. 

Figure 14: Fontem Holdings faced the most PTAB challenges in 2016, followed closely by Papst Licensing (an NPE). 

Figure 15: Unified filed 29 IPRs against NPEs in 2016, making it the 5th most frequent petitioner at the PTAB.

Definitions

Sectors

High-tech = Technologies relating to software, hardware, and networking.

Medical = Technologies relating to pharmaceuticals, medical devices, and any other health-related technologies.

Other = Technologies relating to mechanical, packaged goods, sporting equipment and any other area outside of high-tech and medical patents.

Entities

Non-Practicing Entity (NPE) = Company which derives the majority of its total revenue from Patent Licensing activities.

Operating Company (or Op. Co.) = Company which derives most of its total revenue from product sales or services. 

Other = Universities / Non-profits / Government / Non-Governmental organizations (NGOs).

NPE (patent assertion entity) or NPE (PAE) = Entity whose primary activity is licensing patents and acquired most of its patents from another entity.

NPE (small company) = Entity whose original activity was providing products and services, but now is primarily focused on monetizing its own patent portfolio.

NPE (individual) = Entity owned or controlled by an individual inventor who is primarily focused on monetizing inventions patents by that individual inventor.

SME = Companies that make less than $200 million in annual revenue.

Venue, Federal District Court

TXED = Eastern District of Texas

DED = Delaware

CACD = Central District of California

ILND = Northern District of Illinois

CAND = Northern District of California

Methodology

The number of reported cases can vary based on what is included. Unified made its best attempt to eliminate mistaken, duplicative, or changes in venue filings, hence the totals may vary slightly compared to other reporting entities.

This includes all District Court and PTAB litigations between January 1, 2016, and December 31, 2016.

Statistics include litigations initiated by NPEs or Declaratory Judgments (DJs) initiated by operating companies against NPEs.

Unified strives to accurately identify NPEs through all available means, such as court filings, public documents, and product documentation.