$12.2B: Counting the Cost

This month, RPX completed its third and most comprehensive annual NPE Cost Report to date—a study of thousands of NPE litigations and the cost to operating companies to resolve them. While the full report is provided only to study participants, we have shared a wealth of information from the study in our public version of the report available here.

As the report states, we estimate that companies in 2014 spent more than $12.2 billion in legal fees and settlement or judgment amounts related to NPE assertions and litigations. This figure represents only a slight dip from 2013’s $12.5 billion estimated cost.

Our study also reveals the growing evidence that a major portion of that spending goes to the unnecessary and significant expense of litigating patents as a precursor to a resolution. Among participating companies, legal costs alone represent over half of the cost to resolve all but the most expensive cases.

Other key findings:

• • Companies report a wide range of costs to resolve NPE cases, ranging from tens of thousands of dollars and below to the high millions.
  • The median combined legal and settlement resolution costs for reported NPE suits is $482,000, but the mean is $5.6 million.
  • Costs vary by market sector and event reached. Suits in some technology/market segments appear to be more expensive to resolve than others, with the semiconductor industry exhibiting the highest reported mean cost. The median cost to resolve NPE suits remains much steadier across technology/market segments.
  • Costs tend to increase as a case reaches key litigation events, such as claim construction.

We provide our 2014 NPE Cost Report – High-level Findings as a tool for all market participants seeking meticulous data and accurate information to guide their understanding of the patent marketplace. Questions and comments about the report or inquiries about participation in RPX’s cost study are welcome at reports@rpxcorp.com.