Operating Company Litigation Held Steady in 2020 Despite COVID-19, but NPEs Pulled Ahead

RPX data show that operating companies filed about as much patent litigation in 2020 as they did the year before, despite the impact of the COVID-19 pandemic. This past year, operating companies added 1,387 defendants to patent campaigns, compared to 1,396 defendants in 2019. Operating companies were responsible for 38.8% of the patent litigation brought in 2020.

NPEs, for their part, actually increased their activity this past year—bringing 11.8% more litigation than the prior year, adding 2,192 defendants (up from 1,961 in 2019). Those filings were responsible for 61.2% of the 2020 total. The increase in NPE litigation in the midst of the pandemic is not a surprise, as their characteristically lean operations—combined with the rapid growth of litigation finance and the steady stream of operating company patents hitting the market—appear to have allowed them to avoid the disruptions that other businesses have faced.

Overall, patent plaintiffs added 3,579 defendants in 2020, a 6.6% increase over 2019 (during which they added 3,357 defendants). From 2017 through 2020, patent litigation has held relatively steady, varying only ±6% from the average over the same period.

Note that this analysis excludes litigation asserting only design patents, shown below in grey, which has historically accounted for a small portion of patent litigation but increased markedly in the third and fourth quarters of 2020. That litigation has primarily targeted alleged counterfeiters of various types of consumer products, including sunglasses, footwear, and children’s toys.

See RPX’s fourth-quarter review for more on the impact of COVID-19, including the factors that contributed to the uptick in NPE litigation in 2020.