Analysing the drop in US district court patent litigation

An analysis of US district court litigation in the first half of 2018 reveals a decline in the number of lawsuits filed as well as data on different types of defendants. In the first half of the year, the Federal Circuit also issued decisions concerning venue.

Data relating to US district court patent litigation pulled from Docket Navigator on August 8 2018 showed a decline in litigation in the first half of 2018 in comparison with previous years.

US district court patent litigation by month
	2012	2013	2014	2015	2016	2017	2018
January	357	485	330	449	275	321	348
February	386	550	447	493	305	316	323
March	533	403	498	510	396	418	402
April	400	604	681	393	459	457	377
May	406	502	388	609	391	411	308
June	437	484	413	656	462	413	317
July	341	478	421	478	424	385	322
August	563	520	397	310	413	416
September	463	552	320	326	324	317
October	509	515	341	442	408	454
November	517	578	332	843	370	336
December	540	422	440	280	427	304
Total for year	5,452	6,093	5,008	5,789	4,654	4,548	2,397
Average monthly cases filed	454.33	507.75	417.33	482.42	387.83	379.00	342.43
Source: Docket Navigator

In the first half of the year 2,075 patent cases were filed. This is down from the first half of 2017, when 2,336 cases were filed. Indeed according to data spanning the first halves of 2012 to 2018, the number of cases filed in the first half of this year is the lowest in this range of years. The number of cases filed in the first half of 2018 (2,075), is much lower than the peak of 3,110 cases filed in the first half of 2015 – a record half.

In the first quarter of 2018, 1,072 lawsuits were filed, up from 1,055 in the first quarter of 2017. In the second quarter of 2018, 1,002 cases were filed. This is the lowest quarterly figure in the 2012-2018 period and down from 1,281 in the second quarter of 2017.

An average of 342.4 cases have been filed a month in 2018 so far. This is down from a monthly average of 379.0 for the whole of 2017.

Managing IP recently revealed the top plaintiffs, defendants and law firms in cases filed in the first half.

Level 3 Communications and PersonalWeb Technologies were the top plaintiffs, filing 76 lawsuits. The next most active plaintiffs were Uniloc (48) and Canon (39). 

Apple was the top defendant for the first half of 2018. It was involved in 30 cases. It was followed by two other electronics giants: Samsung and LG, both with 25.

The law firm involved in the highest number of cases for plaintiffs in the first half of 2018 is Stamoulis & Weinblatt. The firm handled 175 cases. Fish & Richardson handled the highest number of matters for defendants in the first half of 2018, with 78 cases.

Data pulled from Docket Navigator on August 8 shows that 322 district court patent cases were filed in July. This is very much in-keeping with the data for the first half of the year, when for all-but-one month the number of litigations lay between 300 and 380. In March the number was 402.

Docket Navigator data indicates that in July the top five most active plaintiffs were Uniloc, with 25 filings, followed by Celgene Corporation, Level 3 Communications, PersonalWeb Technologies and Vista Peak Ventures, all with seven filings. The statistics for July are not a huge departure from the data for the first half of the year. In this, Level 3 Communications and PersonalWeb Technologies were the most active plaintiffs, each making 76 filings while Uniloc had the next highest number of filings (48). Celgene was the fifth most active plaintiff, with 23 filings.  

The top defendants for July signal a slight divergence from the data for the first half of the year. The top defendants in July were Amazon, which was involved in 14 cases, followed by BlackBerry (5), ZTE (5), Apple (4), Innolux Corporation (4), Microsoft Corporation (4) and Teva Pharmaceutical Industries (4). Teva Pharmaceutical Industries was the defendant involved in the third highest number of cases in the first half of 2018. It was a defendant in 24 cases. Amazon was the fifth most active defendant with 14 cases. Apple was the top defendant with 30 cases. BlackBerry, Microsoft, Innolux Corporation and ZTE were not in the top five most active defendants for the first half of the year.

According to a report on Q2 litigation trends by RPX, in the first quarter of the year, non-practising entities (NPEs) added 399 new defendants in patent litigation. NPEs added 419 new defendants to patent lawsuits in the second quarter of the year.

In contrast, the number of new defendants that were operating companies fell in the second quarter of the year. There were 389 operating companies as new defendants in the second quarter compared with 538 in the first quarter. Overall, data from the first and second quarter of the year reveals that there were fewer new defendants in the second quarter of the year (808) in comparison with the first quarter (936).

In TC Heartland v Kraft Foods Group Brands, the Supreme Court decided that a civil action for patent infringement may be brought in the district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

The RPX report states: “The District of Delaware remains the most popular venue for NPE litigation, as it has been for every full quarter since TC Heartland issued.” The Eastern District of Texas, which was previously the most frequently used venue is now in second place for NPE litigation for these quarters. The District of Delaware has also been the most popular venue for operating companies since the TC Heartland decision.

In the aftermath of TC Heartland, some Federal Circuit judgments have provided further clarity on venue. In In re: HTC, the Federal Circuit stated that foreign defendants can be sued in any district. However, plaintiffs have to prove that it is not American subsidiaries but rather foreign parent companies that have committed acts of infringements in the district of choice. In In re: ZTE, the Court held that plaintiffs have the burden of proof in improper venue motions. And in In re: BigCommerce, the Court stated that where companies are incorporated in multi-district states like Texas, the venue must be where they have their registered office or principal place of business.

RPX also analysed NPE market developments. In the second quarter of this year, “Intellectual Ventures continued to divest patents to other NPEs, some of which have since asserted the patents in litigation,” says RPX.

The following assignments were noted by RPX: multiple portfolios from IV to two litigating affiliates of patent monetisation firm IPValuation Partners in the second quarter; multiple patent assets from IV to CXT Systems recorded by the USPTO in May; an assignment of more than 400 patents from IV to Vista Peak Ventures, an affiliate of Dominion Harbor Enterprises, recorded in early April; and monetisation firm Longhorn IP announcing that its subsidiary Nordic Interactive Technologies had acquired an international portfolio of patents from IV in late April.

Furthermore, according to RPX, in the second quarter of the year operating companies assigned patent portfolios to a range of NPEs, many of which are frequent plaintiffs. One example is Panasonic’s assignment of a patent portfolio to Conversant Intellectual Property Management.