Litigation Targeted Numerous Sellers of Counterfeit Goods in Q2

RPX’s latest quarterly report shows that operating company litigation held fairly steady in the first half of 2023, at 538 defendants added—exceeding 1H 2022 by 18 defendants (or 4% greater). Operating company plaintiffs added 249 defendants in Q2, which was just 5% lower than the year-ago quarter, though it fell short of the trailing three-quarter average by 22% and lagged behind Q1 by 14%.

However, that data exclude another distinct category of litigation filed by a small group of design and utility patent owners targeting copycats and counterfeiters selling products online. RPX excludes such “e-seller” cases from analyses of district court litigation because they tend to follow a different dynamic compared to what one might consider the usual patent suit. These e-seller cases sometimes name hundreds of defendant entities, many of which may be merely online storefronts or aliases for the same ultimate parent. Also, plaintiffs primarily seek injunctive relief instead of damages, and their cases often end with the e-seller defendant’s failure to answer, followed by a default judgment.

This category of litigation, which began to spike in Q3 2020, is shown in grey below to illustrate its magnitude. As evident from the rightmost bar, e-seller litigation in Q1 2023 accounted for 1,161 defendants added, or 65% of all litigation during the quarter (subject to the caveat about defendants with multiple online storefronts noted above).

Apart from the following graph, the remaining analyses in this report exclude pure design patent and e-seller litigation.

See RPX’s second-quarter report for more on the key trends that shaped patent litigation in Q2 and the first half of the year.