Operating Company Litigation Decreased in the First Half of the Year

Operating companies added 579 defendants to patent litigation campaigns in the first half of 2021, or 16.7% fewer than the same half of 2020 (during which they added 695 defendants).

Additionally, as shown in the table below, operating companies added 325 defendants during the second quarter, 16% fewer than they did in same period last year. Second-quarter operating company filings were 0.9% lower than the trailing three-quarter Q2 average but were 28% higher than in Q1 2021 (during which they added only 254 defendants). Operating companies were responsible for 34.9% of the patent litigation filed in Q2.

Note that the analysis above omits litigation filed by a small group of design and utility patent owners targeting copycats and counterfeiters selling products online. RPX now classifies these cases separately, as the dynamics of anti-counterfeit cases are quite different from other operating company patent suits, in that they primarily seek injunctive relief plus forfeiture of cash balances held in online merchant accounts, and they often end in default judgments. Moreover, these suits sometimes name hundreds of defendant entities, many of which may be online storefronts for the same ultimate parent.

While such litigation was once rare, RPX observed spikes in design patent and e-seller litigation starting in Q3 and Q4 2020, with hundreds of defendants targeted in just a handful of lawsuits. Although this type of litigation slowed in Q1 2021, filings spiked again in the second quarter, as reflected in the graph below—totaling 974 defendants added, more than NPE and other operating company filings combined.

See RPX’s second-quarter review for a more detailed breakdown of these and other trends impacting patent litigation and the patent marketplace.