Overview

Not even a pandemic could stop patent litigation and PTAB activity from growing in 2020. As companies began to look for ways to trim and fueled by a wave of litigation financing, NPEs are now more sophisticated and have greater access to assets to enforce. These two factors contributed to both the growth of litigation activity and petitioners using the PTAB to help combat these assertions. It would be expected moving forward that this trend would continue into 2021. 

Highlights:

• WSOU Investments accounted for 5% of all patent litigation in 2020 and was the most active assertor with 187 cases brought in district court. 

• The Western District of Texas saw a 216% increase in the number of cases brought. This venue had 808 patent cases brought, which 83% of them were assertions by NPEs. 

• Although Q4 saw a slight decrease in terms of litigation and PTAB filings, litigation was the highest since 2016 and PTAB filings were the highest since 2018. 

• The PTAB Board use of 314(a) procedural denials increased by 60%.

• Unified Patents was the 4th most active petitioner at the PTAB with 39, behind Samsung, Apple, and Google.

Figure 1: This year US Courts and the PTAB saw a total of 5,259 cases, an increase of 12.5% from 2019. District courts litigated a total of 3,744 patent cases, the highest since 2016 (4,382 cases). Despite the rise of discretionary denials, the PTAB had 1,515 filings, the highest since 2018 (1,717 filings).

Figure 2: The 4th quarter of 2020, saw a 13% decrease from the previous quarter and had 1,231 total filings. This dip however, was still higher than any quarter in 2019 with the exception of the 2nd quarter in 2019.

Figure 3: While the PTAB remained the most popular venue for patent disputes, the Western District of Texas became the new rocket docket with 83% of all cases (672 out of 813), being a NPE. This is a 216% increase from 2019 where the WDTX only saw 256 cases. The Delaware District Court saw a decrease of 27% in patent disputes from 2019.

Figure 4: High-Tech litigation continues to dominate both district courts and the PTAB, comprising 65% (2,423 out of 3,744 cases) and 62% (931 out of 1,515 filings) respectively.

District Court

Figure 5: NPE-related litigation increased by 17% from 2019, with 2,291 cases. This is a high since 2016. Also, the total number of patent disputes increased by nearly 12% from 2019 and nearly matched 2016. 

Figure 6: Looking quarter-by-quarter NPE-related litigation continues to remain at its 5-year average of 59%. While the 4th quarter of 2020 saw a decrease of 13% in cases from the 3rd quarter, it remained higher than the 4th quarter of 2019. 

Figure 7: WSOU Investments, an NPE, dominating 2020 cases, with 187 or 5% of all patent litigation. The top-10 named asserting entities in 2020, were NPEs.

Figure 8: Google was the top first-named defendant in 2020, followed by the most prolific telecommunication and networking manufacturers.

Figure 9: In 2020, 65% of all new US district court patent cases involve High-Tech companies.

Figure 10: NPE activity in the High-Tech sector alone continues to contribute more 2020 patent infringement cases than all non-NPE patent litigation combined.

Figure 11: NPEs accounted for 90% of assertions in High-Tech Litigation in 2020.

PTAB Disputes

Figure 12: This year saw a 15% increase in total number of filings. The 1,515 filings is the highest since 2018. The Board’s institution rate in inter partes reviews decreased to 58.4%.

Figure 13: This quarter, the PTAB received a total 340 requests for inter partes reviews, a 28% decrease from last quarter. Despite this decrease it matches the previous 4th quarter of 2019. NPE related-filings accounted for 40% of all filings, matching the 5-year average.

Figure 14: One reason that could explain the dip in filings, is the explosive growth of the PTAB Board’s use of Procedural Denials. The board use of the 314(a) denial increased 100% from the previous year to 167.

Figure 15: Consistent with district court proceedings, approximately 63% of petitions filed in 2020 involved High-Tech companies.

Figure 16: Approximately 55% of all AIA challenges filed in 2020 that involved High-Tech companies related to NPE-controlled patents.

Figure 17: As CBMs drifted into the sunset this year, IPRs remained the most popular post-grant proceeding at the PTAB.

Figure 18: This quarter saw Samsung as the most frequent petitioner with 121. Unified came in fourth with 38 petitions.

Figure 19: NPEs were the most challenged Patent Owner this year, accounting for 7 of the top 10.

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

NJD = New Jersey

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 litigations between January 1, 2015 and December 31, 2020.

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.

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