Anticounterfeit Litigation Swung Back Up in the Third Quarter

RPX’s latest quarterly report shows that operating company litigation was down by about 7% in Q3 2022—and that decline that was even greater, at 14%, when excluding Abbreviated New Drug Application (ANDA) litigation targeting generic drugmakers. Yet that data exclude another, distinct category of litigation filed by a small group of design and utility patent owners targeting copycats and counterfeiters selling products online.

RPX excludes such “e-seller” cases from analyses of district court litigation because they tend to follow a different dynamic compared to a typical patent suit: These e-seller cases sometimes name hundreds of defendant entities, many of which may be merely online storefronts for the same ultimate parent. Additionally, plaintiffs mainly seek injunctive relief instead of damages, and their cases often end with the e-seller defendant’s failure to answer, followed by a default judgment.

This category of litigation, which began to spike in Q3 2020, is shown in grey below to illustrate its magnitude. As evident from the rightmost bar, e-seller litigation in Q3 2022 accounted for around 1,000 defendants added, or 55% of all litigation during the quarter (subject to the caveat about defendants with multiple online storefronts noted above).

See RPX’s third-quarter review for more on trends shaping patent litigation and the patent marketplace.