Overview

Keeping with the trend of previous years, the volume of new patent disputes decreased yet again in the first three quarters of 2019. But Non-Practicing Entities (NPEs) appear unfazed as evidenced by an increase in NPE-initiated district court cases compared to prior year, perhaps fueled in-part by the sharp decrease in new PTAB petitions and low institution rates.

Highlights:

• The number of new PTAB proceedings (IPRs, CBMs, and PGRs) is down 22% compared to the same period in 2018. Meanwhile, the PTAB’s institution rate remained steady with trial being instituted in 62% of IPRs in 2019.

• District court patent litigation is down 5.5% compared to the same period for 2018 (down 43% compared to the peak in 2015). However, NPEs in Q1-Q3 2019 filed 1,424 new district court cases, slightly more than the number of new NPE cases in 2018.

• Patent litigation in Delaware District Court increased 16% compared to the same period for 2018 with approximately 750 new cases since the beginning of the year. DED is also the most active venue for NPEs which account for 65% of infringement contentions filed there.

• Unified is the 5th most frequent PTAB petitioner through Q3 2019. Unified filed 32 new IPRs in 2019 against some of the most widely asserted NPE patents.
  

Figure 1: Assuming current trends continue, the volume of America Invents Act (AIA) proceedings for 2019 is expected to be just above 1,300 petitions, the lowest number of new petitions since the PTAB came into effect. View all District Court and PTAB litigation on our Portal.

Figure 2: Approximately 700 new district court litigations were filed in Q3 2019, the lowest in a single quarter since 2012.

Figure 3: The PTAB remains the most popular venue for patent disputes overall, however, the Delaware District Court is the most popular venue for NPEs in 2019. The Eastern District of Texas, on the other hand, has seen significantly less activity as it dropped to the 4th most popular venue for patent litigation.

Figure 4: The majority of new patent cases involve the High-Tech industry. View High-Tech litigation on Unified’s Portal.

District Court

Figure 5: NPEs are responsible for over 1,400 new cases (more than 58% of all patent litigation) in 2019, a slight increase compared to 2018. Thus, even as patent litigation decreased from 2018 to 2019, the proportion of new cases attributed to NPEs continues to grow.

Figure 6: Nearly 60% of all new district court patent cases involve High-Tech companies.

Figure 7: NPE activity in the High-Tech sector alone contributes more new patent infringement cases than all non-NPE patent litigation combined. View High-Tech litigation on Unified’s Portal.

Figure 8: Over 90% of all High-Tech litigation in 2019 is attributed to NPE assertions against High-Tech companies. View all 2019 District Court litigation on Unified’s Portal.

PTAB Disputes

Figure 9: The PTAB received 320 new petitions in Q3 2019 — the lowest number of new petitions in a quarter since 2014. Meanwhile, the Board’s institution rate in inter partes reviews remained steady at 62%. More details for these PTAB proceedings are available on Unified’s Portal.

Figure 10: Consistent with district court proceedings, approximately 60% of petitions filed in 2019 involved High-Tech companies.

Figure 11: Approximately 56% of all AIA proceedings filed in 2019 involved High-Tech companies challenging NPE-controlled patents. Explore this data further on Unified’s Portal.

Figure 12: IPRs continue to be the most popular AIA proceeding type at the PTAB.

Figure 13: Unified was the 5th most frequent petitioner at the PTAB in 2019. Apple was the most frequent petitioner with 46 petitions filed. View all of Unified’s cases on the Portal.

Figure 14: 7 of the top 10 most frequently challenged patent owners are well-known patent licensing entities. Uniloc, an NPE that has filed over 150 new district court cases in the past year alone, was the most frequently challenged Patent Owner with 50 new IPRs filed against its portfolio in 2019.

Definitions

Sectors

High-Tech = Technologies relating to Software, Hardware, and Networking
Medical = Technologies relating to Pharmaceuticals, Medical Devices, 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. Could be an SME or a large company.
Other Entity = Universities / Non-Profits / Government / Non-Governmental Organizations (NGOs)
NPE (Patent Assertion Entities) = 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.

Venues

CACD = Central District of California
CAND = Northern District of California
DED = Delaware District Court
NJD = New Jersey District Court
NDIL = Northern District of Illinois
SDNY = Southern District of New York
TXED = Eastern District of Texas
TXWD = Western District of Texas

Methodology

This report includes all District Court and PTAB litigation between January 1, 2015 and September 30, 2019.

Total 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. 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.