Patent Litigation Trends and Court Location Choices

For patent holders, deciding where to file their suit is a decision driven by the intrinsic characteristics of federal district courts. Over time, patent holders, and non-practicing entities specifically, have gotten more sophisticated in picking the locations of their legal battles. Overall, although both achieve two-thirds success rates at trials, non-practicing entities are successful 24% of the time, while practicing entities are successful 34% of the time. In this blog post, I will be exploring the trends in decisions regarding patent litigation suits, as well as the curious trend of patent holders filing their litigation suits in the Eastern District of Texas.

A PWC report on important patent litigation trends in 2013 found evidence that non-practicing entities (NPEs), more colloquially called patent trolls, are generally becoming more successful as time passes. They found that on average, damages awarded to NPEs have more than doubled compared to damages for practicing entities over the last decade, with university/non-profit NPEs having the highest success rates and individuals having the lowest. Furthermore, royalties have consistently remained the primary patent damage award, with 80% of patent litigation awards taking the form of royalties over the past six years.

Certain federal courts are favored by patent holders due to their shorter time-to-trial duration, higher success rates, and larger median damages awards, with the top five federal courts accounting for 39% of all identified decisions involving an NPE as the patent holder. The Eastern district of Texas has generally been the court of choice, with 12% of all NPE decisions occurring there, trials often lasting only a week, and juries that are thought to be inclined towards large verdicts. According to a recent report by the law firm Perkins Cole, 1,260 patent cases were filed in East Texas last year, compared to about 1,000 filed in Delaware, the second most frequent patent litigation court. Defendants there are unlikely to win cases on summary judgement, with judges often deferring to juries to rule on patent issues. This last point is especially salient, as PWC reports that the median jury award was nearly 45 times the median bench award between 2007 and 2012.

I further discuss my thoughts on this topic at the following link:
https://www.youtube.com/watch?v=sRK2BDS0W7Q