Patent litigation in the United States showed an upward trend in the first half of 2024, with non-practicing entity (NPE) filings increasing significantly compared to the same period in 2023. The Eastern District of Texas remained the top venue for patent cases, while the Western District of Texas maintained its position as the second most popular district for NPEs despite changes in case assignment rules. The District of Delaware saw a continued decline in NPE filings due to heightened transparency requirements.

Many plaintiffs were linked to established patent monetization firms or industry veterans. Litigation funding continued to play a significant role, with several new campaigns tied to prominent funders. Notably, there has been an increasing push for transparency in litigation funding. The District of Delaware, under Chief Judge Colm F. Connolly, has been at the forefront of this movement, requiring detailed disclosures of third-party funding arrangements. This trend has influenced practices in other jurisdictions and sparked debates about the proper scope of such disclosures.

At the Patent Trial and Appeal Board (PTAB), petition filings held relatively steady compared to 2023. The USPTO moved forward with planned reforms to PTAB procedures, including proposed rules on discretionary denials. However, the Supreme Court's elimination of Chevron deference cound create uncertainty around agency rulemaking especially with the recent develops of ANPRM and Patent Eligibility Restoration Act. Ex parte reexamination requests reached record levels as an alternative to PTAB challenges.

Several important rulings impacted patent litigation in 2024. The Supreme Court's decision in Loper Bright Enterprises v. Raimondo overturned the Chevron deference doctrine, potentially affecting USPTO regulations and procedures. In the Western District of Texas, a revised case assignment order aimed to address concerns about judge shopping, though its full impact remains to be seen. This combined with the disclosure rules in Delaware has led to the emergence of the Eastern District of Texas.

In the standard-essential patent (SEP) space, China's courts asserted global rate-setting power over foreign patent pools. The Unified Patent Court in Europe issued its first rulings on SEPs, revealing divergent approaches among local divisions on issues such as licensing transparency and securities for NPEs. Overall, patent litigation dynamics continued to evolve in response to legal developments, venue changes, and market forces.

Key Highlights:

Both NPE and non-NPE litigation show significant increases in the first half of 2024 compared to the second half of 2023, with NPE filings growing by 14.06% and non-NPE filings by 13.44%
Eastern District of Texas remained the top venue; Delaware NPE filings declined further
Reexamination requests have increased dramatically, doubling from the first half of 2023 to the first half of 2024. This represents a major shift in patent challenge strategies.
Supreme Court overturned Chevron deference, creating uncertainty for USPTO rulemaking
Chinese court asserted power to set global FRAND rates for foreign patent pools
$847 million jury verdict awarded in funded NPE campaign against Verizon
The Unified Patent Court in Europe issued its first SEP-related rulings

Overview:

Figure 1: District Court filings have seen a significant increase of 8.62% in the first half of 2024 compared to the same period in 2023. , a substantial reversal of the declining trend observed last year. PTAB filings have remained relatively stable, with a slight increase of 0.92%. This suggests that the use of PTAB proceedings has plateaued after years of decline from its peak. Reexamination requests have seen a dramatic increase of 100%, doubling from the first half of 2023 to the first half of 2024. This represents a major shift in patent challenge strategies.

Figure 2: Both NPE and non-NPE litigation show significant increases in the first half of 2024 compared to the second half of 2023, with NPE filings growing by 14.06% and non-NPE filings by 13.44%. This represents a notable uptick in overall patent litigation activity, with both types of plaintiffs becoming more active in roughly equal measure. The similar growth rates suggest that factors driving increased litigation are affecting both NPEs and operating companies alike, potentially indicating broader market or legal changes encouraging patent assertions. This recent trend contrasts with the longer-term pattern of declining NPE litigation and growing non-NPE litigation observed in previous years. The data points to a possible resurgence in patent litigation across the board, though longer-term observation would be needed to determine if this represents a sustained shift or a temporary fluctuation.

Figure 3: Patent Assertion Entities (PAEs) show a notable increase of 10.24% in the first half of 2024 compared to the same period in 2023, indicating a resurgence in activity from this group of NPEs, while individual NPEs saw a similar increase of 11.48%, suggesting continued engagement from individual inventors or patent holders. In contrast, small company NPEs experienced a significant decrease of 46.73%, pointing to potential challenges or strategic shifts for smaller entities in patent assertion. Operating companies demonstrated the largest increase at 15.80%, indicating a growing trend of patent assertions by practicing entities, which aligns with the broader shift towards non-NPE litigation observed in recent years

Figure 4: The Eastern District of Texas remained the top venue for overall patent litigation and NPE filings in 2024, maintaining its long-standing popularity despite changes in other districts. The Western District of Texas held onto its position as the second most popular district for NPEs, even after modifications to its case assignment rules aimed at reducing the concentration of cases before Judge Alan D. Albright. Notably, the District of Delaware saw a continued decline in NPE filings, largely due to heightened transparency requirements implemented by Chief Judge Colm F. Connolly, particularly regarding third-party litigation funding disclosures.

Figure 5: High-tech sectors dominate patent litigation, accounting for 56.2% of district court filings and 65.2% of PTAB challenges, significantly outpacing medical-related cases which represent only 13.1% of district court filings and 8.7% of PTAB proceedings, while other sectors show a more balanced distribution, comprising 30.7% of district court cases and 26.1% of PTAB challenges, suggesting that high-tech patents are more frequently contested in multiple forums compared to other industries.

Litigation Investment Entity Tracker (LIEs):

Figure 6: Litigation Investment Entities (LIEs) in patent litigation cases showed an upward trend from 2019 to 2022, peaking in 2020-2021 with quarterly numbers often exceeding 300 cases. A dramatic decline began in 2023, with quarterly figures dropping below 160 cases. The downward trend has continued into 2024, with Q1 showing 152 cases and Q2 further declining to 99 cases, the lowest recorded.

Figure 7: Jeffrey M. Gross dominates LIE activity with 86 cases, followed by Dynamic IP Deals LLC (42 cases), Intellectual Ventures LLC (30), and Empire IP LLC (27), showing a concentrated market where these top entities are significantly more active than others. There's a sharp decline in case numbers after the top five, with most listed entities having single-digit case numbers, indicating a long tail of less active LIEs in the patent litigation financing landscape.

Figure 8: According to AST IP Transaction Report, patent deals in Q1 2024 totaled 430, down from a revised 501 in Q4 2023. Q3 2023 saw 463 deals, while Q2 and Q1 2023 had 542 and 492 deals respectively. The Q1 2024 figure may be revised upward in future reports due to potential delays in USPTO recording, as evidenced by the 8% of Q4 2023 transactions only identified in Q1 2024. Recent quarters generally show between 400-550 patent deals, indicating a fluctuating but relatively stable market.

District Court:

Figure 9: In 2024, Non-Practicing Entities (NPEs) dominated the list of top patent litigants, with Jeffrey M. Gross leading the pack at 140 cases filed. Other prolific NPE plaintiffs included Pueblo Nuevo (60 cases), Patent Armory (59 cases), and Equitable IP (53 cases). Notably, Hyper Ice was the most active operating company plaintiff, filing 34 cases. The top 10 list was rounded out by other well-known NPEs such as Leigh M. Rothschild (33 cases), VDPP (29 cases), Empire IP (24 cases), Intercurrency Software (23 cases), and Dynamic IP (21 cases). This data underscores the continued significant role of NPEs in patent litigation, with nine out of the top ten plaintiffs being NPEs. The high number of cases filed by these entities suggests an aggressive patent assertion strategy, particularly in sectors like technology and software. The presence of Hyper Ice as the sole operating company in the top 10 indicates that while some practicing entities are actively enforcing their patent rights, NPEs continue to drive a large portion of patent litigation activity in 2024.

Figure 10: In 2024, major technology companies continued to be the primary targets of patent litigation, with both NPEs and operating companies (OpCos) filing suits against them. Samsung faced the highest number of lawsuits, with 21 from NPEs and 9 from OpCos, totaling 30 cases. Amazon followed closely with 24 total cases (19 NPE, 5 OpCo), while Alphabet (Google's parent company) defended against 21 suits (15 NPE, 6 OpCo). Other tech giants in the top ranks included Microsoft (13 cases), Apple (13 cases), and Cisco (11 cases). Notably, telecommunications companies AT&T and Verizon each faced 12 lawsuits. The pharmaceutical sector was represented by Hetero Drugs with 13 cases. LG rounded out the top 10 with 11 total cases. This data highlights the continued focus of patent assertions on large technology and telecommunications companies, with NPEs generally filing more suits against these defendants than operating companies. The presence of a pharmaceutical company in the top ranks also indicates ongoing patent disputes in the healthcare sector.

Figure 11: In the second quarter of 2024, high-tech patent litigation in U.S. district courts was overwhelmingly driven by Non-Practicing Entities (NPEs), accounting for 88.3% of all cases. Patent Assertion Entities (PAEs) were the dominant force, filing 62.8% of the total cases. Individual NPEs were the second most active group, responsible for 20.5% of filings, while small company NPEs contributed an additional 5.1%. In contrast, operating companies initiated only 11.3% of high-tech patent lawsuits, significantly less than NPEs but still a notable presence.

PTAB:

Figure 12: In 2024, PTAB filings showed mixed trends between NPEs and Non-NPEs, with Q1 seeing higher NPE activity (180 petitions) compared to Non-NPEs (148 petitions), while Q2 reversed this pattern with Non-NPEs filing more petitions (192) than NPEs (136). This fluctuation represents a significant year-over-year change from Q2 2023, with NPE filings decreasing by 26.49% and Non-NPE filings increasing by 61.34%. The 2024 data suggests a continued dynamic environment at the PTAB, with both NPEs and Non-NPEs remaining active participants, though the balance of activity between the two groups appears to be shifting quarter by quarter.

Figure 13: In 2024, the Patent Trial and Appeal Board (PTAB) saw a mix of Non-Practicing Entities (NPEs) and operating companies among its most frequent patent owners facing challenges. Fortress, a well-known NPE, led the list with 27 patents challenged, highlighting its significant patent portfolio and its prominence in PTAB proceedings. Echostar, an operating company in the satellite and television technology sector, was the second most challenged patent owner with 18 patents, demonstrating that operating companies also face substantial scrutiny at the PTAB. NPEs continued to be well-represented, with AlmondNet and Smith Interface each having 15 patents challenged, followed by Greenthread with 14. Atlantic IP and Proxense, both NPEs, had 12 patents each under review. Among operating companies, Yangtze River (12 patents) and Oura Health (11 patents) also featured prominently. Rounding out the top 10 was individual NPE Greg Raleigh with 10 patents challenged. This data indicates that while NPEs remain significant targets at the PTAB, comprising 70% of the top 10 patent owners, operating companies in tech-related fields also face considerable patent validity challenges. The diversity of patent owners suggests that the PTAB continues to be a key venue for contesting patent validity across various sectors and entity types.

Figure 14: The data shows the number of PTAB petitions filed against major technology companies, categorized as either Non-Practicing Entities (NPEs) or Operating Companies (OpCos) in 2024. Samsung faced the most PTAB challenges overall, with 45 petitions (23 filed by NPEs and 22 by OpCos), indicating it's a significant target for both types of entities. Apple received the highest number of NPE-filed petitions at 39, suggesting it's a primary target for NPE patent assertions. Alphabet (Google's parent company) and Comcast each faced 29 NPE-filed petitions, with Alphabet also defending against 9 OpCo-filed petitions. Other major players like AT&T, Nokia, Ericsson, and T-Mobile showed similar patterns, with the majority of petitions against them filed by NPEs. Notably, Cisco faced a more balanced challenge, with 8 NPE-filed and 11 OpCo-filed petitions. This data highlights the patent litigation landscape in the tech sector, where large companies are frequent targets of PTAB challenges, primarily from NPEs but also significantly from other operating companies. The prevalence of NPE-filed petitions against these major tech firms underscores the ongoing impact of NPE patent assertion strategies in the industry.

Unified Patent Court:

Figure 15: The Unified Patent Court (UPC) has shown significant growth in its first year of operation, with case filings increasing by 85.23% from the first to the second half-year, totaling 445 cases by June 2024. Monthly filings have been variable, ranging from 10 to 65 cases, indicating a still-stabilizing caseload. In early 2024, the UPC issued its first rulings on standard-essential patents (SEPs), revealing divergent approaches among local divisions on key issues such as licensing transparency in FRAND cases and securities for NPEs. The court has demonstrated openness to granting preliminary injunctions, including for NPEs, potentially making it an attractive venue for certain types of patent assertions. These developments suggest that the UPC is rapidly establishing itself as a significant forum for patent litigation in Europe, with evolving practices that are shaping the patent enforcement landscape across its member states.

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.

NPE Aggregator = Entity that has control or ownership over two or more entities.

Litigation Investment Entities = Evidence of any third party with a financial interest, other than the assertors.

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

UPC = Unified Patent Court

Methodology:

This report includes all District Court and PTAB litigations between January 1, 2015 and June 30, 2024.

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.

DynaIP entity, Autonomous IP, self-driving patent challenge instituted

Factor2 Multimedia authentication patent challenged

Unified Patents represented at WIPO Assemblies 2024

Patent Dispute Report: 2024 Mid-Year Report