Numerous Online Storefronts Targeted over Copycat Products in Q3

RPX’s latest quarterly report shows that operating company litigation was up slightly in Q1-Q3 2023 at 802 defendants added, a 3% uptick compared to that same timeframe last year (during which operating companies added 780 defendants). Operating companies also added 279 defendants in the third quarter, an increase of 8% from Q3 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 spike in Q3 2020, is shown in grey in the graph on the next page to illustrate its magnitude. As evident from the rightmost bar, e-seller litigation in Q3 2023 accounted for 1,639 defendants added, or 71% of all litigation during the quarter (though note that this number is subject to the caveat about defendants with multiple online storefronts outlined above).

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

See RPX’s third-quarter review for more on the key trends that have shaped patent litigation in Q3 and the year to date.