Decline in Q1 NPE Litigation Mainly Triggered by IP Edge’s Pause and Changes in West Texas

NPEs added 333 defendants to patent litigation campaigns in the first quarter of 2023, a decrease of 190 (36%) compared to Q1 2022, when NPEs added 523 defendants.

There were two primary reasons for this decline, the most significant of which was a pause by a single NPE. Patent monetization firm IP Edge LLC, historically the most litigious NPE by a wide margin, stopped filing litigation altogether in late November after facing pressure over disclosure rules in the courtroom of Delaware Chief Judge Colm F. Connolly (as covered further in RPX’s report on the first quarter). That pause extended through the entirety of the first quarter.

Before halting its activity, IP Edge typically sued roughly 50 defendants each month, so while Q1 2022 included 147 defendants from plaintiffs under IP Edge control, the first quarter of 2023 saw none.

The second factor is due to a downturn in the Western District of Texas; specifically, in the Waco Division, where defendants added by NPEs in Q1 fell 55% from 190 to 85 as compared to the prior-year period. Added together, the reductions from IP Edge and in Waco (231 defendants in total, adjusting for the overlap in IP Edge and Waco cases) accounted for 100% of the decline in NPE activity in Q1 and then some.

The cause of the drop in Waco’s NPE filings appears to be a standing order posted on July 25, 2022 by the Western District’s former Chief Judge, Orlando F. Garcia, that was designed to reduce the concentration of patent litigation before District Judge Alan D. Albright. However, as detailed in RPX’s Q1 report, the Western District has been assigning new cases in existing campaigns to the same judge who oversaw prior related litigation. The result has been that the bulk of the “legacy” Waco cases filed since then have still ended up before Judge Albright.

See the full Q1 in Review for more on this and other trends impacting patent litigation in the first quarter.