Patent Risk Digest

Busy Patent Market Means Litigation Risk

Litigation statistics offer just one indicator of patent litigation risk. That data show a continuous flow of patent infringement suits over the long term, ebbing and flowing with periodic spikes.

But market activity—the buying and selling of patents between companies—explains why patent litigation is so persistent. It can also show the nature and scope of risk on the horizon.

Patents for Profit

The US Patent and Trademark Office (USPTO) has issued more than 325,000 patents a year for the past two years, adding to the many millions of patents already in circulation. From this trove, companies aiming to invest in patents for profit look for patents that are, or will soon be, ripe to enforce.

The more widely used the technology described in the patent, the greater the potential to successfully demand licensing payments or just sue for infringement, targeting companies that make, sell, or even just use the technology. This is why buyers often look for patents covering technologies that are heavily used or on the rise.

Where Risk Resides

Studying the market, we see that when patents transact, litigation frequently follows. A sampling of recent patent transactions indicates where just some of that litigation risk is growing.

For example, since 2015 Monument Patent Holdings, LLC and IP Edge have together picked up 100 patents in 26 transactions, with a number of those patents related to messaging and communications technologies. Blackbird Tech LLC, a relatively new company, has bought 11 patents since 2015. From just these patent purchases alone, these entities—Monument, IP Edge, and Blackbird Tech—have collectively sued nearly 600 defendants to date. Blackbird Tech’s most recent suits, related to gaming patents, have taken particular aim at technologies used in health, medical, and fitness products and services.

Booming Technologies

Two very different companies recently teamed up to try to capitalize on the potential of patents related to artificial intelligence—technology already used in security surveillance, smart cars, fraud detection, and online customer support. Veritone Inc., a developer of cloud-based AI media technology, signed a $50 million funding agreement with Acacia Research Corp., one of the largest entities focused on patent licensing and monetization. Acacia will help Veritone build and enforce its patent portfolio, which already comprises 90 issued and pending patents.

These transactions represent just a sampling from less than a year of market activity in 2016. Companies can take steps now to assess their current and future patent litigation risk by partnering with a third party that not only can determine their financial exposure, but also insure against it.

Contact Us

For further information on news and data presented in the Patent Risk Digest, or to subscribe now, please contact patentriskdigest@rpxcorp.com. Click here for information on RPX Patent Litigation Insurance.