Thursday, June 5, 2008

Study Ranks Top Venues for Patent Litigation

A recent study provides valuable insights for those involved in patent litigation.

The study (.pdf), by PricewaterhouseCoopers, compiles data regarding recent patent litigation cases and provides statistical support for the conventional wisdom that patent holders fare better in jury trials, as plaintiffs, and before certain district courts. According to the study:

  • The disparity between jury and bench awards has widened and is likely the contributing factor in the significant increase in use of juries since 1995.
  • Alleged infringers increase their trial success rates slightly as plaintiffs, but have not seen the same increased success in summary judgments.
  • Certain federal district courts (particularly Virginia Eastern, California Central, and Pennsylvania Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards.

The report ranks the top 20 district courts for patent-holding plaintiffs, the top 10 of which are:

  1. Virginia Eastern
  2. California Central
  3. Pennsylvania Eastern
  4. Wisconsin Western
  5. Florida Middle
  6. Texas Eastern
  7. Delaware
  8. Texas Southern
  9. New Jersey
  10. Colorado

The study also reflects on certain trends in patent litigation:

  • The number of infringement actions filed rose to 2,896 in 2007, a compound average growth rate (“CAGR”) of 5.8% since 1991.
  • The number of patents granted rose to 183,831 in 2007, a CAGR of 3.8% since 1991.
  • The annual median damages award since 1995 has remained fairly consistent, when adjusted for inflation.
  • Reasonable royalties continue to be the predominant measure of damages awards.
  • Patent holders are successful 37 percent of the time, with a 19 percent win rate in summary judgments and a 57 percent win rate at trial.
  • While the median time-to-trial has been fairly constant since 1995, significant variations arise by jurisdiction, and patent holder success rates tend to decrease with longer time-to-trial, up to a point.
  • 32 percent of summary judgments are appealed, with 59 percent modified or reversed; while 43 percent of trial decisions are appealed, with 67 percent modified or reversed.

While the study appeals to all patent holders / litigants, readers of this blog may be interested in some of these statistics because consumer packaged goods companies (“CPGs”) often patent their products to protect their investments in research and development, and retailers occasionally get involved in patent litigation. The study states that, for the category that appears to encompass CPGs -- “miscellaneous manufactured goods,” the median damages awarded were $1.35 million, and the median time to trial was 2.2 years.

For those CPGs (and others) involved in patent litigation, the study is worthwhile reading, and can aid litigants in making strategic decisions such as where to file infringement lawsuits. For the full report, click here.

Update Aug. 18, 2008: This article in Texas Lawyer today observed that the Eastern District of Texas has slowed substantially in time to trial.

 

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