According to data from Lex Machina, there has been a sharp decline in the number of patent litigation case filings so far in 2014. The obvious question this leads to is whether the patent litigation centric patent reforms presenting pending in the Congress are required if the number of patent infringement cases being brought is declining.
In January 2013, there were 490 new patent complaints filed. The number of new patent cases filed in January 2014 was 322. This represents a 34.3% drop in the number of new patent filings year to year, and represents the lowest number of new patent litigations since October 2011. See Patent Case Filings Drop Sharply in January to 322.
A source familiar with Lex Machina’s data tells me that the number of new patent lawsuits filed in February 2014 was also quite lower than during February 2013. During February 2013, according to Lex Machina data there were 548 new patent cases filed. The number of new patent cases filed during February 2014 was 456, which represents a decline of 16.8% year to year.
During the first two months of 2013 a total of 1,038 patent cases were filed, according to Lex Machina data, while the number of patent cases filed during the first to months of 2014 was just 778. This represents a decline of 25%.
It is a little early to tell whether this is a sustainable trend, but at the very least this has to raise significant questions about whether the current patent legislation pending in the United States Senate is truly necessary. The currently pending patent legislation, which as already been approved by the United States House of Representatives, nearly exclusively relates to alleged reforms of the patent litigation process.
This gives new credence to the position of the AIPLA as explained by Todd Dickinson when he testified on the Hill about patent reform in December 2013. Acknowledging that there are some studies that reach the conclusion that there is a problem with increasing patent litigation Dickinson explained in prepared remarks: “What is still under serious debate is how well the available data supports the conclusions of these studies, which are often based on confidential information and surveys.”
Dickinson also pointed out that the relatively new post-grant proceedings ushered in by the America Invents Act (AIA) were “are expected to decrease abusive patent litigation practices by reducing the issuance of low quality patents and by providing a lower-cost administrative procedure for challenging issued patents.” This lead the AIPLA, via Dickinson, to tell Congress: “It may well be premature to conclude that they are not doing the job.”
This new data from Lex Machina supports the conclusion reached by the AIPLA. It is simply too early to know what the overall impact of the AIA will be. As a result, more patent legislation at this point is not warranted. It is particularly not justified given that the Government Accountability Office has concluded that there is no evidence of a patent litigation problem and that 80% of cases brought are brought by manufacturing companies. See GAO Unmasks Mythical Patent Troll Problem and GAO Report Finds No NPE Patent Litigation Crisis.
If you listen to those who want more reform you would mistakenly conclude that abusive litigation brought by unscrupulous actors (i.e., patent trolls) makes up 80% or more of the dockets, but the statistics tell a different story and now it seems patent filings are dropping.
For more on pending patent legislation please see:
- Will Fee-Shifting Solve the Patent Troll Problem?
- What New Patent Legislation Portends for the Small Entity Patent Filer
- House Passes Innovation Act, Battle Goes to Senate