Numerous Online Storefronts Targeted over Counterfeit Goods in Q1

RPX’s latest quarterly report shows that operating companies added 285 defendants to patent litigation campaigns in Q1 2023, or about 8% higher than the first quarter last year (when operating companies added 263 defendants) and 14% more than Q4 2022 (250 defendants). Operating company filings exceeded the trailing average by 7%.

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).

See RPX’s first-quarter report for more on the key trends that shaped patent litigation in Q1.