Patent Litigation Survey: The Numbers Just Keep Climbing
In 2013, the number of patent litigation lawsuits filed in
U.S. district court rose yet again, demonstrating that companies will do
whatever it takes to protect their intellectual property. And nonpracticing
entities, commonly referred to as patent trolls, played a hefty hand in that
increase.
All this meant plenty of work for the law firms chosen to file or defend patent
suits. Many of those that made Corporate Counsel's 2014 Patent Litigation
Survey list, which ranks law firms according to how many federal district court
patent suits they handled in 2013, appear high on the list every year. But in
some cases there has been slight movement in the rankings.
As it has for the past 11 years, the IP firm Fish & Richardson topped
Corporate Counsel's survey, handling almost 200 cases-more than any other firm.
Finnegan, Henderson, Farabow, Garrett & Dunner once again ranked second,
with 103. DLA Piper, which ranked fifth last year, moved up to the number three
spot.
More dramatic movement took place further down the list. Akin Gump Strauss
Hauer & Feld, which was 18th in 2012, moved up to sixth in 2013, handling
83 cases. Intellectual property boutique firm Knobbe, Martens, Olson & Bear
leaped to the No. 7 spot in 2013, with 82 cases. It was 23rd in 2012. And
Latham & Watkins, with 77 cases in 2013, ranked eighth, compared with its
No. 16 spot in 2012.
But no matter the ranking, the totals reflect just how pervasive patent
litigation has become. "Companies have gotten more sophisticated about
IP," said Steve Zager, who heads the IP practice at Akin Gump.
"They're no longer afraid to go to trial to defend or assert their IP
assets."
Indeed, 6,092 new patent lawsuits were filed in 2013, compared with 5,418 new
cases filed in 2012, according to Lex Machina's 2013 Patent Litigation Year in
Review. Most of them were filed in the Eastern District of Texas and the
District of Delaware.
And not surprisingly, nonpracticing entities (NPEs) were a major factor in
those cases, filing 67 percent of all new patent infringement lawsuits in 2013,
according to the RPX Corporation's 2013 NPE Litigation Report.
"We saw troll litigation increase across different industries," says
John Sganga, chair of Knobbe's litigation practice. "There were a lot of
questionable NPE suits out there."
Interestingly, only about 20 percent of identified decisions in 2013 involved
NPE patent holders, according to PricewaterhouseCoopers' 2014 Patent Litigation
Survey, reflecting the much higher tendency for NPE-filed cases to settle or be
dismissed. Patent suits were filed against a variety of different industries,
with consumer products leading the way, followed by pharmaceuticals and
computer hardware and electronics.
Abbreviated New Drug Application (ANDA) litigation continued to grow, a fact
that helped explain Knobbe's notable jump in the rankings. "Our ANDAPharma
practice is quite extensive," Sganga says, noting that Knobbe represents
many generic drug producers.
Who's being sued? Most lawsuit targets tend to be larger, stable companies,
which helped give Akin Gump its boost, says Zager. The firm has represented
such companies as Lenovo Inc., Johnson & Johnson, HTC Corporation, Samsung
Electronics Co. and Google Inc.
While the continued rise in the number of patent suits filed last year may not
be surprising, there was one significant change in 2013: The "mega"
verdicts of prior years all but disappeared. In 2012, three cases resulted in
damages awards of more than $1 billion.
But in 2013 the largest new award totaled just over $200 million, according to
PwC's report. (There were larger awards, but they resulted from a retrial of
damages related to Apple v. Samsung litigation originally tried in 2012).
Monetary awards from patent lawsuits generally decreased, but NPEs in 2013
still found litigation very worthwhile. In fact, the median award earned by
patent trolls was three times higher than the median award given in competitor
vs. competitor lawsuits, according to PwC.
The snapshot from 2013, however, does not necessarily reflect the current
reality. This year the U.S. Supreme Court heard six patent cases and made
rulings that could gradually change the litigation landscape.
The justices' rulings in the spring of 2014 in Octane Fitness v. Icon Health
& Fitness, and in Highmark v. Allcare Health Management Systems, for
example, gave district court judges more leeway in awarding attorney fees to
the prevailing party-a move that raises the stakes for patent trolls and could
discourage them from pursuing litigation.
And the court's recent decision in Alice v. CLS Bank, which clarified the
question of what qualifies as patentable subject matter, almost immediately
resulted in the invalidation of numerous patents. The justice's ruling could
deter companies- especially patent trolls-from asserting weak patents that
would not likely hold up under the new standard.
Companies also have a relatively new tool in their arsenal to try to invalidate
patents, and this, too, could deter trolls: Increasingly, companies are filing
petitions for review with the Patent Trial and Appeal Board (PTAB), which under
the patent law passed in 2011 is authorized to examine a patent's claims and
issue a ruling on validity, usually within a year.
Still, there were serious and significant attempts at legislative patent reform
that began in 2013 and were suddenly and unexpectedly abandoned in 2014. Some
attorneys believe the new Congress may resume the effort next year, but they
say the need for reform is less urgent than it was a year ago.
Other attorneys concede that there is still room for improvement in the patent
system. But they stress that lawmakers should be cautious. "Some change
would be good, says Sganga. "But it's important that the pendulum not
swing too far, or it could hurt legitimate patent owners."
So with all the gradual changes taking place, should we expect to see the number
of patent case filings diminish next year?
Don't count on it, says Zager. Patent trolls are still getting a lot of money-
not just from litigation but also from private equity, he says. There is still
a large incentive for trolls to find more patents, and more corporations will
figure out that they, too, can turn their patents into money-producing assets.
"Patent litigation won't diminish," Zager says. "Just follow the
money."
Who’s Doing the Work
The firms that sue over and defend America's patents
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RANK 2014 |
RANK 2013 |
FIRM NAME |
DEFENDANT |
PLAINTIFF |
TOTAL DISTRICT COURT CASES |
1 |
1 |
Fish |
141 |
58 |
199 |
2 |
2 |
Finnegan |
49 |
54 |
103 |
3 |
5 |
DLA Piper |
91 |
9 |
100 |
4 |
2 |
Kirkland |
74 |
18 |
92 |
5 |
9 |
Perkins Coie |
64 |
20 |
84 |
6 |
18 |
Akin Gump |
82 |
1 |
83 |
7 |
7 |
Alston & Bird |
71 |
11 |
82 |
7 |
23 |
Knobbe Martens |
56 |
26 |
82 |
9 |
16 |
Latham |
61 |
16 |
77 |
10 |
13 |
Kilpatrick Townsend |
60 |
15 |
75 |
11 |
8 |
Greenberg Traurig |
62 |
12 |
74 |
12 |
4 |
Winston & Strawn |
60 |
12 |
72 |
13 |
21 |
Jones Day |
56 |
14 |
70 |
14 |
17 |
Foley |
46 |
22 |
68 |
15 |
33 |
Morgan Lewis |
54 |
13 |
67 |
16 |
14 |
Morrison & Foerster |
52 |
11 |
63 |
16 |
37 |
Sidley |
47 |
16 |
63 |
18 |
NA |
Duane Morris |
53 |
9 |
62 |
19 |
18 |
McKool Smith |
29 |
32 |
61 |
20 |
5 |
Cooley |
39 |
21 |
60 |
21 |
15 |
Baker Botts |
49 |
9 |
58 |
22 |
18 |
McDermott |
47 |
10 |
57 |
23 |
11 |
Orrick |
46 |
10 |
56 |
23 |
21 |
Quinn Emanuel |
39 |
17 |
56 |
23 |
27 |
Wilson Sonsini |
47 |
9 |
56 |
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