Litigation Targeting Counterfeit Products Spiked in Q4

RPX’s latest quarterly report shows that operating company plaintiffs added 1,161 defendants to patent litigation campaigns in 2023, an increase of 14.5% from the year before. Operating companies also added 283 defendants in Q4, a 19% upswing compared to the fourth quarter of 2022.

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 rise in Q3 2020, is shown in grey below to illustrate its magnitude. As evident from the rightmost bar, e-seller litigation spiked in Q4 2023—accounting for 5,592 defendants added, or 88.5% of all litigation during the quarter (though note that this number is still subject to the caveat about the same defendants potentially operating multiple online storefronts mentioned above).

See RPX’s fourth-quarter review for more on the key trends that shaped patent litigation in Q4 and 2023 overall.