US patent litigation slump continues; Delaware overtakes EDTX as top venue for new suits

US patent litigation slump continues; Delaware overtakes EDTX as top venue for new suits

A slump in US patent litigation, which last year saw the number of new lawsuits fall to their lowest level since 2011, continued through the first half of this year as filed cases dropped below 2,000 to levels not seen for over a decade. The numbers for the last quarter – encompassing April, May and June 2017 - also give the first glimpse of the impact of the Supreme Court’s decision in TC Heartland, with Delaware eclipsing East Texas as most plaintiffs’ venue of choice.  

Unified Patents released its US patent dispute data covering the first half of this year yesterday and it showed that the number of new district court cases came in at 1,914, down 12% on the first half of 2016.  RPX also released its own analysis late last week, showing that litigation is at its lowest level since 2008 when the firm started collating data.

Instead of counting new lawsuits, RPX tracks the total number of defendants added in litigation campaigns. That means that its findings can be compared on a like-for-like basis with the years preceding 2011. This was when the America Invents Act (AIA) became law and changed joinder rules, forcing plaintiffs to file individual suits rather than grouping large numbers of defendants together.

According to RPX’s numbers a total of 1,861 new defendants were added in litigation campaigns in the first half of 2017 — 1,035 in suits brought by NPEs and 826 in cases lodged by operating companies. By comparison, just over 2,000 defendants were added to new litigation campaigns in the second half of 2008, the next lowest six-month total.    

Both Unified and RPX also analysed the impact of TC Heartland, the landmark SCOTUS case concerning venue, revealing the dramatic impact it’s already having on district court litigation. According to RPX, the number of defendants added in cases brought by NPEs dropped by about half in the weeks after the Supreme Court’s May 22nd decision.  

Unified’s analysis shows that the Eastern District of Texas remained the most popular venue for new suits in the first half, with 597 filed in the district compared with 291 in Delaware. But in the weeks following TC Heartland that was reversed, with Delaware seeing a total of 77 new cases filed while just 55 were brought in East Texas.

But what has TC Heartland meant for litigation volume overall? Are patent owners simply shifting their cases to different districts or are they opting not file suits at all? To dig a little deeper into the data I used the Lex Machina database to calculate the number of new patent suits filed from May 23rd (the day after SCOTUS’s decision) to the end of June and compared that for the total lodged in the just over five weeks before the ruling. That showed the total number of new cases dropped from 474 to 445, suggesting that it’s too early to determine any lasting TC Heartland impact.

As RPX suggests in its H1 report that small drop may be down to a summer lull or could be due to some plaintiffs pausing to reconsider their litigation strategies. Either way, with last year’s numbers dropping by around a quarter, the first half of this year suggests that the US is in the middle of a prolonged slump in patent litigation. 

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