Patent risk solutions provider RPX yesterday released its 2015 NPE Activity: Highlights report, which offers a first look at trends in patent litigation activity for 2015. Among the key findings from the RPX report are:
- NPE litigation activity rebounded in 2015 following what now appears to have been a slowdown in the latter half of 2014.
- The Eastern District of Texas continues to dominate as the venue of choice for NPEs. NPEs sued more defendants there in 2015 than in any year since 2009.
- Inter partes reviews (IPRs) and covered business method (CBM) petitions filed with the Patent Trial and Appeal Board (PTAB) that have reached final decision on patent validity have been, on average, successful. However, data also show that the PTAB’s institution rates (allowing petitions to proceed to trial) were on the decline in 2014 and 2015.
With respect to NPE litigation activity, RPX reports that both the number of patent infringement cases filed and the total number of defendants sued increased compared to 2014. The top ten NPE defendants for 2015 were Samsung, AT&T, HP, Apple, Dell, LG Electronics, Amazon, HTC, Lenovo and Sony. The top ten NPEs by defendants sued were Leigh M. Rothschild, eDekka, IPNav, Empire IP, Wi-LAN, CyrptoPeak Solutions, Shipping & Transit, Hawk Technology Systems, Olivistar and Acacia Research.
With respect to the Eastern District of Texas continuing to be the venue of choice for patent plaintiffs, RPX reports that “NPEs sued more defendants in the Eastern District of Texas in 2015 than in any year since at least 2009.” RPX attributes this in part due to rumors of possible venue reform, which could potentially account for the spike in litigation filings during June 2015, when talk of venue reform was most prominent in Congress. Still, the chart below tells an ominous tale.
Over 60% of NPE defendants find themselves defendant patent infringement litigations in the Eastern District of Texas, which is headquartered Tyler, Texas, population approximately 100,000.
In November 2015, IAM hosted a Patent Policy event in Washington, DC. Speaking on one of the panels was Phil Johnson, who is Senior Vice President for IP Policy and Strategy with Johnson & Johnson. When the discussion turned to patent litigation, Johnson cut straight to the heart of the matter. “When I hear people say we don’t trust some of the district courts… they generally mean the Eastern District of Texas, because unless we because unless we mandate what they’re going to do they’re not going to follow this and so we have to have a statute,” Johnson explained. “We can’t leave it to their discretion.”
Johnson’s criticism was direct and perhaps more forceful than some are familiar with, but the sentiment expressed in his words is widely shared within the industry. There is great frustration with the Eastern District of Texas, and it seems that much of the patent reform discussion is due to very real and legitimate frustrations with the Eastern District of Texas.
I find it particularly troublesome that reforms being discussed would weaken patent rights and make it difficult, if not impossible, for patent owners to seek redress for legitimate cases of patent infringement. The problem, to the extent there is any widespread problem, is with abusive conduct by a small number of players. Something can be done to eliminate that abusive conduct, but if and only if something is done to address the Eastern District of Texas.
There is something fundamentally unfair, practically un-American, about having a remote, rural area of Eastern Texas be the court that disproportionately handles patent infringement cases. For crying out loud, whenever a question is raised about whether it makes sense in the specialized world we live into today to have specialized courts everyone protests vehemently. I understand the Constitutional concerns, but we de facto have a specialized patent infringement court in the Eastern District of Texas.
Johnson summed up this problem perfectly; referring to it is one of judge shopping, as he calls it. He explained:
Right now the Eastern District has different rules than pretty much anywhere else and as I understand it under the standing Order… all patent cases that are filed in Marshall are assigned to Judge Gilstrap, 100% of them. So essentially what plaintiffs are being told is if you file in Marshall you’ll get Judge Gilstrap and Judge Gilstrap has an overwhelming number of patent cases compared to any other judge in the country. I think he may have 1300 or 1400 cases, maybe more than that. He may have as many as 15-20% of all patent cases filed. I think we could agree, and this is without commenting on Judge Gilstrap himself or what he does as a judge, but I think we could agree that in our judicial system two things I think have always been evident. First of all, a plaintiff may have the right to choose where the case is brought, if not who the judge is who hears the case. Number two… no single judge should have a disproportionate percentage of patent cases. You should have those cases spread around so you have the development of different ideas, which can add to the law… as we do everywhere else.
The full report includes information and insight on NPE litigation volume, top plaintiffs and most targeted defendants, patent validity challenges (IPRs and CBMs), and the size of patent portfolios offered for sale.