Patent Litigation in the United States, 1980 to 2020

By Gene Quinn
November 4, 2021

“The precipitous decline in patent cases commenced beginning in 2016 is likely due to a capitulation by many patent owners who finally started to come to terms with the fact that many legacy patents were simply not going to survive the Federal Circuit’s restrictive interpretation of the Alice/Mayo framework.”

https://depositphotos.com/461955494/stock-photo-patent-litigation-is-shown-on.htmlIs patent litigation out of control? Has patent litigation ever been out of control? The answers to these questions largely depend upon your point of view, and as with most complex topics, the truth is nuanced. What is not nuanced are the numbers reported in the annual reports from the  Administrative Office of the United States Courts, which shows that the number of patent cases that reach trial are extremely few. In fact, the number of cases that make it to the final pre-trial conference represents a small subset of the number of cases that are filed.

I initially started this research in 1997, while working on my Master’s thesis, which dealt with patent litigation and the use of alternative dispute resolution.

The real growth in patent litigation over the last 40 years has taken place before trial. Between 1980 and 2020, the number of patent cases reaching trial ranged between a low of 63 (in the COVID-19 affect FY 2020) but was otherwise at a low o 64 (in FY 2019) and a high of 164 (in FY 2016). All are a remarkably low number of cases that proceed to trial given the number of patent lawsuits commenced. For example, 6,497 patent cases were commenced in 2013, some 5,686 patent cases were commenced in 2014 and some 5,564 patent cases were commenced in 2015. So, just like all other areas of litigation, very few cases proceed to trial. See Figure 1 (below).

Indeed, if you focus on the period prior to enactment of the America Invents Act in 2011, which occurred just two weeks before the end of FY 2011, the number of trials remained remarkably constant, averaging 100.03 trials per year for the previous three decades. In FY 2012, the number of trials spiked to 139, spiked again to 164 in FY 2016 and stayed high at 151 in FY 2017, before dropping to 99 in FY 2018, to 64 in FY 2019, and 63 in FY 2020.

Figure 2 (above), which relates to the number of patent cases terminated, shows a visually compelling surge in the number of patent cases terminated beginning in 2011 and remaining above the trend line through 2018. Two major events seem likely to account for this surge, which peaked in 2014. The Supreme Court’s decision in Alice Corp. v. CLS Bank, 134 S.Ct. 2347 (2014) was delivered in June 2014. This was the fourth in a series of patent eligibility decisions by the High Court that all retreated from the expansive view of patentability previously announced by the Court in Diamond v. Diehr, 450 U.S. 175 (1981) and Diamond v. Chakrabarty, 447 U.S. 303 (1980). As a result of the culmination of the patentability cases from 2010 to 2014, motions to dismiss became commonplace in patent litigation where software patents, medical diagnostics or DNA were the subject matter.

The second event that explains the dramatic surge in terminated cases beginning in 2011 is the establishment of the Patent Trial and Appeal Board (PTAB) and the three new post grant proceedings at the United States Patent and Trademark Office used by defendants to challenge issued patents. Inter partes review (IPR) and covered business method (CBM) review were the two proceedings primarily responsible for challenges, since they were available to challenge patents issued under the pre-AIA first inventor to file regime. In the early days of the PTAB, it was a killing field survived by few patent owners, who would have their litigations stayed in federal court pending the outcome at the PTAB.

Also noteworthy is the data displayed in Figure 3 (above), which shows a significant uptick in the number of patent litigations initiated in 2016 and 2017, which can almost certainly be attributed to the significant uptick in patent cases commenced immediately following the enactment of the AIA. As a part of the AIA, Congress wanted to make it more difficult for patent owners to sue large numbers of defendants in a single case where there might not be a true nexus of issues, although the same patent might be alleged to be infringed. As a result of making it more difficult to sue large numbers of defendants in a single case, patent owners predictably filed more lawsuits, which was erroneously used as evidence to suggest patent litigation was out of control, when the outcome was a specific design of the AIA (i.e., to have smaller, more focused patent infringement lawsuits).

The precipitous decline in patent cases commenced beginning in 2016 is likely due to a capitulation by many patent owners who finally started to come to terms with the fact that many legacy patents were simply not going to survive the Federal Circuit’s restrictive interpretation of the Alice/Mayo framework regarding patent eligibility. These patents written for a different era did not have the sufficient disclosure to satisfy the newly announced and retroactively applied expectations. This, in combination with an overactive PTAB, dramatically decreased the number of patent infringement lawsuits.

Over the last five years, the number of patent cases commenced in federal district court has reverted to historical norms, even as the number of patents issued continues to grow.

 

 

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 9 Comments comments. Join the discussion.

  1. CW5 November 4, 2021 10:45 pm

    I would like to see two graphs:

    1. The amount of money Big Tech has spent on Lobbying for so-called patent reform for each year from 1980 to the present; and

    2. The number of cases in which the CCPA/CAFC has held patents invalid for failure to claim eligible subject matter from 1980 to the present.

    These graphs will show the harm Big Tech has done to our country.

  2. MaxDrei November 5, 2021 6:20 am

    Thinking about what makes a properly functional patent litigation system, it seems to me (based on experience in England) that i) litigation ought to be a “last resort” ii) given adequate fact-finding procedures and stable case law, less than 5% of cases commenced should need to go to full trial iii) going to appeal on an issue of law ought to be justified in less than one third of cases tried at first instance, and iv) given full trial of a patent where the issues stand 50:50 on infringement and 50:50 on validity (as it should be if litigation is a last resort) then patent owners ought to win (ie get to an “infringed and not invalid” outcome) only one case in every four that they take to full trial.

    Of course, I do appreciate that, whether or not that all happens in England, in the USA issues of “inequality of arms”, or asymmetric dispute positions, and the inability of courts to manage that inequality, prevent it happening in the USA.

    What the writer’s impressive research and various plots seem to me to show is a return to historical normality, from which we learn that it really matters, whether or not the case law is stable.

  3. Night Writer November 5, 2021 6:30 am

    The OMB did a study of patent litigation to determine if there was a troll problem back in 2009 (I think it was) and concluded there wasn’t. Obama then ignored this and proceeded to get the AIA passed claiming there was trolls.

    The OMB is considered the most objective study on this issue.

  4. Rich Baker November 5, 2021 11:45 am

    In the 1990s and 2000s, companies would accept a letter and talk through a license without going to court. There were a series of decisions on DJs in the late 2000s that made licensing letters dangerous, and led to more sue-first approaches to licensing. Add in eBay to stop the threat of injunctions, and several decisions minimizing royalties, and the general approach is to ignore licensing letters. So litigation is the only recourse that a patent owner has.

  5. Paul F Morgan November 5, 2021 1:23 pm

    Is not a significant input to the suit filing “hump” in these charts that part of the September 2011 enacted Leahy-Smith America Invents Act (“AIA”) in which Congress stopped single patent infringement suits against multiple unrelated defendants, thus requiring multiple separate suits?

  6. Anon November 5, 2021 8:00 pm

    MaxDrei, ever foolish…..

    a return to historical normality, from which we learn that it really matters, whether or not the case law is stable.

    Stable? really?

    The Gordian Knot is not stable – if you hade been paying attention, you would have noticed that panel decisions at the CAFC pay no heed to its own precedents, zigging and zagging this way and that.

    Still.

  7. anon November 6, 2021 2:14 pm

    Wait a minute — heaven and earth have been moved and the direness of “Oh N0es, Tr011s” (with the resultant deconstruction of what once was the world’s Gold standard in innovation protection) was because of less than 200 cases a year going through the (fully legitimate) government-set-up court resolution process?

    Future historians may well view this in far less favorable light than the house imprisonment of Galileo.

    https://www.history.com/.amp/this-day-in-history/galileo-is-accused-of-heresy

  8. Moderate Centrist Independent November 6, 2021 3:25 pm

    “The answers to these questions largely depend upon your point of view, and as with most complex topics, the truth is nuanced.”

    Exactly. Republicans in many states claimed that personal injury damages were out of control and pushed through damages caps. A solution in search of an imaginary or overly exaggerated problem.

  9. Jonathan R Stroud November 8, 2021 2:15 pm

    This is a fascinating and worthwhile read and valuable research, and puts the data first, which I appreciate. The key takeaway for me is this: “The real growth in patent litigation over the last 40 years has taken place before trial.”

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website