Delaware NPE Filings Dropped Further in Q2 as Second-Place West Texas Hung On

In Q2 2024, the Eastern District of Texas was once again the top district for overall patent litigation (i.e., filings from all plaintiff types) and NPE litigation. However, the District of Delaware continued its downward slide in the NPE rankings, dropping from third to fifth place—pulling the district from second to third place for overall litigation even though its operating company litigation held relatively steady compared to Q1. Meanwhile, the Western District of Texas climbed to second place for overall litigation in Q2, also remaining the number-two district for NPEs last quarter.

Delaware’s NPE numbers have plummeted as a result of pressure over transparency in the courtroom of Chief Judge Colm F. Connolly, who in April 2022 began requiring the wide-ranging disclosure of information on corporate control and funding. Starting later that year, this triggered a heated battle with NPEs linked to monetization firm IP Edge LLC after Judge Connolly, probing into their failure to comply with those rules, identified wide-ranging fraud and ethical violations by those involved. IP Edge stopped filing there as a result, and since the firm had previously accounted for much of Delaware’s NPE volume, this alone was responsible for most of the drop—but other NPEs have followed suit as well.

West Texas, which was the top patent district from Q2 2020 to Q4 2022, has also fallen in the rankings due to a July 2022 order designed to reduce the concentration of patent litigation before District Judge Alan D. Albright. That order, issued by former Chief Judge Orlando Garcia, provides that patent cases filed in the Waco Division—once guaranteed to flow directly to Judge Albright, as the division’s only judge—would be randomly assigned among a larger group of judges, including Judge Albright. NPEs have increasingly avoided Waco as a result, though the impact of that change has dented Judge Albright’s caseload less than some had expected, due to the district’s practice of assigning new filings related to prior litigation to the same judge as older cases. However, a revised order issued in May 2024 now requires parties to file briefs detailing why cases should be assigned as “related” to a certain judge, but it remains to be seen whether this will shift the status quo.

Meanwhile, plaintiffs and their counsel have begun to look beyond Waco in seeking a preferable West Texas venue. In particular, patent cases are increasingly flowing to the Midland-Odessa Division, where District Judge David Counts essentially adopted Judge Albright’s standing order governing patent cases, with some minor changes, shortly after the issuance of the July 2022 case assignment order. Since the July 2022 order and its May 2024 replacement are both specific to patent cases filed in Waco, plaintiffs are still free to target Midland-Odessa, where they are guaranteed to get Judge Counts, the division’s only district judge, under the same single-judge filing loophole that enabled Judge Albright’s former dominance.

Though Judge Counts had scarcely ever overseen patent cases before the assignment order and his adoption of Judge Albright’s rules, with just one defendant added in his courtroom in 2021, his caseload has risen steadily each year since, reaching 12 defendants added in 2022 and 35 in 2023. While these are still relatively small numbers, it is also worth noting that one of the top plaintiff-side firms by volume, Ramey LLP, has increasingly focused on Midland-Odessa. Though Ramey LLP filed virtually no cases there before Q3 2022, it has filed a steadily greater share of its litigation there, even as its overall filings in the district have dipped: After accounting for 14% of the firm’s West Texas litigation in 2023 (at 16 defendants added, or 46% of Judge Counts’s total 2023 caseload), 75% of the defendants added by Ramey in West Texas in Q1 2024 were in Midland-Odessa (albeit, at just nine of 12 total), and 55% in Q2 (six out of 11 defendants).

See RPX’s second-quarter review for more on patent venue and other key litigation trends in Q2 and the first half of 2024.