No Major Surprises in 2013 NPE Litigation Report: Cases, Total Defendants, and Unique Defendants All Up

RPX was founded on the belief that the current litigation-centric approach to monetizing patent value is deeply flawed. The rational way to determine—and effectively transfer—asset value is through an open, non-confrontational market approach.

And because the foundation of any successful market is freely available information, we have been steadily compiling data for the last five years on both NPE litigation activity and the costs associated with acquiring, litigating, and licensing patents. In the year ahead, we will be issuing various trend reports, and we have just published a report detailing NPE behavior during 2013.

As in our NPE litigation report for 2012, we tracked trends in cases filed, defendants added, and unique defendants. At the same time, the 2013 report includes data on new metrics, including NPE campaigns.

We have defined a campaign as encompassing all litigations filed by the same plaintiff (an NPE or entities that it controls) and asserting the same or related patents (including, for example, continuations of previously asserted patents). We believe that tracking campaigns can be illuminating because focusing solely on the number of cases may overstate the scale of the distinct disputes being contested. NPEs, after all, often file multiple cases involving the same or related patents against a single defendant.  Our goal is to quantify the trend in disputes between NPEs and operating companies, not just in courtroom activity.

The 2013 report also adds data on validity challenges in inter partes and covered business method reviews at the USPTO. Defendants are using both procedures more frequently, and each is a telling metric of NPE activity.

Among the key data points reviewed in the 2013 NPE Litigation Report:

• NPEs sued more than 2,600 unique companies in 2013.
• 67% of all cases filed were filed by NPEs.
• NPEs initiated 345 new campaigns, and the average number of defendants per campaign was 12.
• 61% of the unique defendants had less than $100 million in annual revenue (and 68% were private companies).
• NPE litigation volume rebounded post-AIA. Total cases grew more than 18%, from 3,042 in 2012 to 3,608 in 2013; total defendants rose by 13% to 4,843.
• Acacia and IP Navigation were the most active plaintiffs, filing 239 and 147 cases, respectively.
• The ITC fell in popularity—only nine investigations were begun in NPE cases, down from 14 in 2012.
• There were 314 IPR petitions and 54 CBM petitions filed against NPEs since inception in late 2012; the filing rate increased dramatically in the second half of 2013.

The full 2013 NPE Litigation Report is available online here.