On the Campaign Trail: Data Show Shift in NPE Behavior

In last month’s blog post, RPX reported a surge in NPE litigation in the first half of 2015 based on cases filed and defendants added. A look at the same data through another filter—NPE litigation campaigns—adds further insight into NPE behavior. Most notably, in the first half of 2015, more NPE defendants were, for the first time, hit with a new campaign than were added to an old one. This shift raises intriguing questions about how NPEs might be responding to recent interest that both the courts and Congress have taken in patent reform.

By RPX’s definition, a litigation campaign comprises all cases filed by the same plaintiff, inclusive of all members in the corporate family, where each case has at least one patent or family member of a patent in common with another case in the campaign. During a six-month period, an active campaign is either new, meaning it actually began during those six months, or existing, meaning it started earlier but added at least one defendant within that time frame. (The active campaign count for a half-year period does not include campaigns without at least one defendant added within the six months.)

The data, grouped by active campaign, confirm that NPEs collectively file fewer campaigns (see Figure 1) but sue many more defendants than operating companies do (see Figure 2). Perhaps equally intuitive, this view of the data also shows that while the number of NPE litigation campaigns remains steady over time, the number of defendants that NPEs sue fluctuates. The contrast suggests that NPEs regulate their activity by how many defendants they name rather than by how many campaigns they initiate.

However, a closer look at how NPEs add defendants reveals something new. From the first half of 2012 through 2014, the data indicate that NPEs added more defendants to old, active campaigns than to new campaigns. In the first half of 2015, however, that pattern has flipped. That is, NPEs added more defendants by suing them in new, rather than existing, campaigns, and the data from the prior six months suggest that this change in behavior was underway in the second half of 2014.

What had happened by mid-2014 to trigger this change? Fallout from the America Invents Act—specifically, validity challenges via inter partes or covered business method review that prove fatal to older campaigns—might be one explanation for this shift. US Supreme Court decisions, such as Alice and Octane, as well as other moves toward patent reform, may also have driven NPEs to reconsider the strength of patents already asserted in ongoing campaigns. It is certainly possible that NPEs were suddenly motivated to find stronger, unrelated patents to assert, rather than to rely on patents already in suit. RPX will continue to track NPE litigation data, organized by campaign, to better understand whether this change represents a temporary aberration or a more permanent trend.

RPX’s methodology is more fully described in its annual NPE Litigation Report. Comments and questions are welcome; please send them to reports@rpxcorp.com.