Patent Litigation Increased in 2020 Despite COVID-19 and Slight Q4 Dip, Driven by NPE Filings

The patent ecosystem proved quite resilient to COVID-19 in 2020, which ended with an increase in patent litigation compared to 2019 despite the pandemic—although filings declined slightly during the fourth quarter.

In particular, Q4 2020 saw 2.9% less patent litigation than in the same period last year, with 966 defendants added (compared to 995 added in Q4 2019).

However, that decline occurred despite an increase in NPE litigation. In Q4, NPEs filed 8.9% more litigation than they did in the year-ago quarter, adding 552 defendants (compared to 507 in Q4 2019). NPE filings also beat the four-year trailing average for Q4 by 4.3% and were 6.4% higher than the prior quarter. NPE litigation accounted for 57.1% of the defendants added in Q4 2020.

Rather, the dip in Q4 filing levels is the result of a drop in litigation filed by operating companies, which added 414 defendants this past quarter, or 15.2% fewer than they did in Q4 2019 (during which they added 488 defendants).

Overall, patent plaintiffs added 3,579 defendants in 2020, a 6.6% increase over 2019 (during which they added 3,357 defendants). NPEs accounted for 61.2% of the 2020 total and filed 11.8% more litigation in 2020, adding 2,192 defendants (up from 1,961 in 2019). Meanwhile, operating company filings held steady in 2020, adding 1,387 defendants—or 38.8% of the yearly total.

Note, however, that the above data exclude cases asserting only design patents, as the fourth quarter of 2020 was the second in a row in which RPX observed a surge in defendants—mostly online merchants—named in design patent suits, as reflected in the graph below.

See RPX’s fourth-quarter review for more on this and other trends affecting patent litigation and the patent marketplace.