US patent litigation up 15% in 2015, with NPEs increasing share

US patent cases filed in US district courts
	2013	2014	2015
January	486	330	445
February	547	448	491
March	404	500	507
April	605	680	390
May	503	387	608
June	485	414	654
July	476	419	478
August	521	395	309
September	552	320	327
October	515	340	444
November	578	334	844
December	422	439	277
Total for year	6,094	5,006	5,774
Source: Docket Navigator/Managing IP

The second-highest annual number of patent cases were filed in US district courts last year.

According to figures from the Docket Navigator database, some 5,774 patent cases were filed in US district courts in 2015. 

This was 15% higher than the 5,006 cases filed in 2014, but 5% lower than the 6,094 cases filed in the record 2013 year.

Last year was a record year for Patent Trial and Appeal Board (PTAB) filing, however. 

Some 1,797 petitions were filed during the 2015 calendar month, up 7% on the 1,677 filed in 2014. Inter partes review (IPR) petitions made up 92% of the PTAB petitions filed last year.

The pace of PTAB petition filing slowed near the end of the year, however. 

The figure for the fourth quarter of last year was a 9% drop on the third quarter and was down 20% on the fourth quarter of 2014.

Two reports this week back up this finding.

According to a study released by Unified Patents that counted 5,769 patent cases in 2015, non-practicing entity (NPE) litigation accounted for 67% of district court cases initiated in 2015. This was up from 61% in 2014.

Unified Patents – which protects its members against NPEs in defined "zones", including by filing IPR petitions – defines an NPE as a company that derives the majority of its total revenue from patent licensing activities.

The Eastern District of Texas was the most popular venue overall, with 2,536 cases filed in the district during 2015. NPEs initiated 95% of these cases.

Unified Patents said high-tech was the only sector where a majority of cases were NPE-related. NPEs were involved in more than 88% of all 2015 high-tech cases, up 10% on 2014.

According to Unified Patents, 42% of PTAB petitions filed in 2015 were against NPE-owned patents. Some 59% of the PTAB petitions filed last year were high-tech related, while 19% were medical related. Some 58% of the high-tech PTAB petitions were filed against NPE patent owners.

Legal analytics company Lex Machina also released figures for 2015 patent litigation this week. It counted 5,830 patent cases in district courts last year, up from 5,070 in 2014.

Last year’s fourth quarter was the first increase in case filings over the third quarter since 2012. Lex Machina said the 1,577 cases filed in the fourth quarter of 2015 was a 41.2% rise over the fourth quarter, and the strongest quarter-over-quarter rise in 10 years. 

There was a spike in case filings on November 30, the day before a rule change came into effect that eliminated Form 18. Lex Machina said a record 259 patent cases were filed that day. Form 18 was a bare-bones patent complaint often used to plead direct infringement claims. 

RPX this week released a 2015 NPE Activity report that also found NPE litigation rebounded in 2015 after a dip in 2014. The report noted that new court procedural rules that came into force in December and a spike of filing in the Eastern District of Texas during the summer made outsized contributions to 2015’s robust showing and highlighted the adaptive nature of NPEs.

The defensive patent aggregator counted 5,203 patent cases filed in 2015, with NPEs filing 3,604 of them, or 69%.

“NPE activity rebounded in 2015 after what now appears to have been a slowdown in the latter half of 2014,” said RPX. “Since last year, patent validity challenges under the America Invents Act (AIA) have continued to grow in popularity and enjoy measurable success. 

It continued: "The Supreme Court’s Alice decision has also begun proving its worth, invalidating many low-quality software patents asserted in NPE suits. In 2014, this combination of factors might have seemed insurmountable to NPEs; yet clearly, these and other defendant-friendly developments failed to slow the overall rate at which new lawsuits were filed in 2015.”

RPX’s definition of NPEs comprises: patent assertion entities (entities believed to earn revenue predominantly through asserting patents); universities and research institutions; individual inventors; and non-competing entities (operating companies asserting patents outside their areas of products or services).

RPX believes that looking at total defendants added in cases is a better measure of NPE litigation activity because the reforms in 2011 brought in new rules for how plaintiffs could sue multiple defendants over the same patents, changing how cases are counted. RPX said 7,834 total defendants were added in cases in 2014, with NPE cases representing 5,349 of them, or 68%.

The company believes that the “most sophisticated measure” of NPE litigation, however, is total campaign defendants added in campaigns. A total of 6,135 defendants were added in 2015, with 4,098 added in NPE campaigns, or 67%. RPX defines “campaigns” as clusters of litigation brought by the same plaintiff, each of which involves at least some of the same or related patents.

Top 10 NPE defendants by new cases
Rank	Defendant	Cases
1	Samsung	71
2	AT&T	50
3	HP	43
4	Apple	40
5	Dell	40
6	LG Electronics	39
7	Amazon	36
8	HTC	35
9	Lenovo	34
10	Sony	32
Source: RPX's 2015 NPE Activity report

RPX revealed the top 10 NPE defendants in 2015 were much the same as in past years, with a list of global internet and technology giants. Samsung was the defendant in the most new cases, with 71. It was followed by AT&T (50), HP (43) and Apple and Dell (both 40).

However, RPX said a much broader range of large and smaller automotive, banking, retail, e-commerce, consumer products, and shipping companies also were targeted by the 10 most active NPEs of the year.

RPX identified the top 10 NPEs by campaign defendants added, with Leigh M Rothschild top, with 139, followed by eDekka, with 102.  Rounding out the top five were IPNav (96), Empire IP (81) and Wi-LAN (75).

NPEs sued more defendants in the Eastern District of Texas in 2015 than in any year since at least 2009, said RPX. The report noted that NPEs sued more defendants overall in June 2015 than in any month since 2013, primarily in the Eastern District of Texas “perhaps due to rumours of venue reform emerging that same month”.

“More significantly, the Eastern District’s popularity has increased in the last three years, from 32% in late 2012 to 64% in late 2015,” said RPX. “This increase is likely due to recent defendant-friendly changes – Alice (June 2014) and stays pending IPR (September 2012 onward) – that appear to be less effective in this venue, making it even more popular among NPE plaintiffs.”

Top 10 NPEs by campaign defendants added
Rank	NPE	Defendants
1	Leigh M Rothschild	139
2	eDekka	102
3	IPNav	96
4	Empire IP	81
5	Wi-LAN	75
6	CryptoPeak Solutions	65
7	Shipping & Transit	65
8	Hawk Technology Systems	59
9	Olivistar	57
10	Acacia Research Corporation	56
Source: RPX's 2015 NPE Activity report

The report said the Eastern District of Texas has long been thought to be the most plaintiff-friendly litigation venue and remains by far the district of choice for NPEs to bring suit.

“In fact, its popularity grew in the last two years, suggesting that NPEs have increasingly sought the most hospitable litigation environment possible while facing the headwinds of successful Alice and AIA patent validity challenges,” said RPX.

RPX also revealed details of the patent portfolios that had been offered to it. In 2015, 678 portfolios were offered to RPX with an average size of 17 patents. This was down from 2014’s figures of 688 portfolios with an average of 19.7 patents, and 2013’s high of 829 portfolios and an average of 12.2 patents. 

This story has been updated from its original version to add in three paragraphs about figures from Lex Machina, which were released on January 7.