Overview

As the new year begins, NPEs (Patent Assertion Entities) this quarter filed less leading to a drop in patent disputes across all venues. NPE litigation overall is down 10.4% compared to last quarter. Interestingly, looking at NPE cases over the past couple of years, 80% of them typically terminated within one year of the filing date. The Texas Western District, which sees 33.3% of all NPE cases, is still the preferred spot for NPEs. IP Edge entities account for 30% of all NPE assertions and nearly a quarter of all patent litigation with Cedar Lane Technologies not too far behind.

Highlights:

• Overall patent disputes are expected to decrease across all venues. District court litigation is projected to be down 9.4%, PTAB 9%, and Ex Parte Reexaminations 15.7%.

• Notably absent from District Court filings are NPE cases with a decrease of 2.8% versus last quarter and 10.4% from Q1 2021. 

• The Texas Western District court accounts for 26.2% of all US patent litigation and is still the leading forum for NPEs. 

• IP Edge entities accounted for 111 assertions this quarter, 30% of all NPE assertions.

• Unified Patents is the 6th overall highest filer this quarter with 6 IPRs and 25 Reexams.

Figure 1: Notably there is a decrease in patent disputes across the board already in Q1 2022. At the current rate of filing, District Court Litigation is projected to be down 9.4%, PTAB 9%, and Ex Parte Reexaminations 15.7% in FY2022.

Figure 2: Notably NPE cases are down 2.8% in Q1 2022 compared to Q4 2021 and down 10.4% when compared to Q1 2021.

Figure 3: NPEs that aggregate patent activity remained the same, with 404 district court filings this quarter, compared to 402 last quarter.

Figure 4: NPE litigation has increased year-over-year since 2018 but 80% of those cases were terminated within 1 year from their filing date.

Figure 5: The Texas Western District Court with 174 NPE cases accounts for 26.2% of patent litigation in the US in Q1 2022. The Texas Western District Court NPE litigation continues to come close to all patent-related litigation in Delaware.

Figure 6: NPEs prefer the Texas Western District Court 33.3% of the time, with nearly 80% of all cases in that district NPE-related.

Figure 7: High-Tech litigation continues to dominate both district courts and the PTAB.

District Court

Figure 8: If numbers stay consistent, district courts are expected to see a decrease of 21.6% in FY2022 and NPE litigation is expected to decrease by 9.1% in FY2022.

Figure 9: Cedar Lane was one of the top asserting entities in Q1 2022. There were three IP Edge entities in the top 10 asserting entities in Q1 2022. IP Edge’s Hitel Technologies, Noblewood, and Bataan Licensing had 28 cases.

Figure 10: IP Edge had 36 unique entities accounting for 121 assertions, nearly 30% of all NPE (PAE) assertions in Q1 2022. The top-10 most litigious entitles can be seen below.

Figure 11: High-tech companies populated the list of first named defendants. Zydus Pharmaceuticals is the only exception among the top 8 defendants.

Figure 12: Over 70% of all district court litigation in Q1 2022 was related to the high-tech sector.

Figure 13: 97% of NPE litigation targets were high-tech companies in Q1 2022, while only 27.3% of Non-NPE litigation targets were high-tech companies.

Figure 14: Almost 85% of high-tech litigation is brought by an NPE.

Figure 15: The most targeted CPCs by NPE litigation are data processing, database management, payment authorization, distributed node communication, terminal devices, indexing and web crawling.

PTAB Disputes

Figure 16: PTAB filings are projected to mirror district court litigation with a 9% decrease and NPE-related disputes will decrease by 5.8%.

Figure 17: PTAB Q1 2022 petitions totaled only 303.

Figure 18: Consistent with district court proceedings, approximately 67.7% of all PTAB petitions filed in Q1 2022 involved High-Tech companies.

Figure 19: Approximately 54% of all AIA challenges filed in Q1 2022 involved High-Tech companies petitioning NPE-controlled patents. Explore this data further on Unified’s Portal.

Figure 20: IPRs remained the most popular post-grant proceeding at the PTAB claiming 82.5% of all PTAB petitions. Reexaminations were the second most popular, accounting for nearly 15% of all patent challenges at the USPTO. Explore this data further on Unified’s Portal.

Figure 21: Collectively, Apple, Samsung, and Google accounted for 33% (93) of all petitions at the PTAB. Unified Patents was 6th in total petitions in Q1 2022.

Figure 22: It is no surprise that 8 out of the top 10 patent owners at the PTAB are NPEs. What is interesting is all of the IPR petitions against Ericsson's patents were filed by Apple. In its ongoing FRAND battle with Ericson, Apple is using the PTAB to strengthen its position. Smart home and alarm companies such as Alarm.com and ADT have been suing Vivint in district court. That battle has now moved to the PTAB. Late in 2021, the Federal Circuit vacated a decision supporting Alarm.com’s reexamination request because the request was nearly identical to an IPR petition that it had previously denied due to Alarm.com’s abusive filing practices.

Reexaminations

Figure 23: Reexams are projected to drop by 15.7% during 2022 based on Q1 2022. However, this number is still 52% higher than recent lows in 2017-2019 when the average was 176. It should be noted that Unified Patent is 6th overall in reexamination filings with 25.

Standard Essential Patents

Figure 24: According to the ETSI 5G self-declared database, 3,488 unique patent families were declared essential to 5G. It is noteworthy that 5G litigation has already started. IPValuation sued Samsung in EDTX in August of 2021 claiming infringement of 3 patents purported to be relevant to 5G. Samsung responded to IPValuation’s lawsuit by filing three separate IPRs on each of the patents asserted. IPValuation's patents, along with 7 others, were acquired from FG Innovations, which has a personnel pedigree leading to Foxconn. FG innovations self-declared 5G essential 21 unique families comprising 30 US patents and applications. It remains to be seen whether FG Innovations will divest other 5G patents to NPEs for monetization.

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 March 31, 2022 .

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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