2018 Patent Litigation and Marketplace Overview

The patent system has seen a variety of long-held expectations fall by the wayside in recent years, and 2018 was no exception. Over the past year, a series of Federal Circuit rulings and USPTO reforms reshaped district court and PTAB validity challenges as the law governing venue continued to evolve, while the Supreme Court issued a decision in WesternGeco that could dramatically increase damages in many patent suits. Meanwhile, the patent marketplace saw further realignments in 2018, as older, larger NPEs made way for newer, more nimble litigants through a series of notable divestitures and licensing agreements. The strategic impact of these changes has rippled throughout the patent landscape, requiring both plaintiffs and defendants to adjust.

RPX will cover these milestones and a variety of other important events from the past year in an upcoming report. This in-depth publication will include a holistic analysis of litigation data and a qualitative review of notable legal and marketplace developments from 2018.

The full report will be published in March. In the meantime, the following overview includes a high-level snapshot of the data from 2018 and a summary of the additional analysis that will be provided in the report:

Case Filing Trends

A total of 781 defendants were added to patent cases in the fourth quarter of 2018, a decrease of 7.6% over Q3 2018, with NPEs adding 384 defendants in Q4 2018 (around 49.2% of the total) and operating companies adding 397 defendants (50.8%). Overall, a total of 3,106 defendants were added to patent suits in 2018, including 1,532 defendants added by NPEs and 1,574 by operating companies, compared to the 3,346 defendants added in 2017, in which 1,888 defendants were added by NPEs and 1,458 were added by operating companies (a year-to-year decline of about 7.2%). The full report will provide further historical comparisons, a breakdown by market sector, and an analysis of related activity at the Federal Circuit, including filing levels, where appeals originate, and the top parties involved in appeals.

Defendants Added to Campaigns

Venue Trends

Consistent with the trend since TC Heartland, the District of Delaware was the most popular venue for both operating company and NPE litigation in 2018. The Eastern District of Texas was the second-most popular district for NPEs but was only the fifth-most popular district for operating companies, for which the Central District of California held the number-two spot. The full report will provide additional data on venue as well as a detailed analysis of how the law governing venue has changed since TC Heartland.

Top Districts

PTAB Trends

In the fourth quarter of 2018, 476 petitions for AIA review were filed with the PTAB, including 441 petitions for inter partes review (IPR), 19 petitions for covered business method review, and 16 petitions for post-grant review. PTAB filing levels increased overall by about 15% compared to the third quarter, which saw 414 petitions filed. A total of 1,706 petitions for AIA review were filed in 2018, a decrease of roughly 4.8% over 2017 (which saw a total of 1,792 petitions filed). The full report’s PTAB data will be accompanied by an analysis of how judicial rulings have impacted AIA reviews, including:

Grant rates for IPR motions to amend (following the Federal Circuit’s Aqua Products decision in late 2017), and
Data on how parties have reacted to the Federal Circuit’s 2018 Click-to-Call ruling (which held that defendants have a year to file an IPR after getting sued, even when the underlying case later gets dismissed without prejudice).

Total PTAB Petitions Filed

Additionally, the report will include:

Patent Eligibility

A retrospective on the Federal Circuit’s landmark decisions in Berkheimer and Aatrix, which may prevent early Alice challenges in many cases; and a quantitative analysis of success rates for Alice motions in 2018—including a breakdown of how Berkheimer and Aatrix have affected grant rates. This, coupled with information on how particular districts rule on patentable subject matter and a preliminary look at recent USPTO reforms, will illustrate what parties can expect to see as the law surrounding Section 101 continues to evolve in 2019.

Summary Judgment

An analysis of summary judgment motion practice, including nationwide and venue-specific grant rates and the time from case filing to summary judgment; and a ranking of district judges by summary judgment grant rate. Knowing grant rates can inform venue selection and help litigants determine whether filing a summary judgment motion is worth the cost.

Case Outcomes

An overview of the remedies awarded in US patent cases, including injunctions and damages; and a recap of the Supreme Court’s decision on foreign damages in WesternGeco. Furthermore, the report will cover jury verdicts, including a breakdown by district, and will address why the Eastern District of Texas appears to render verdicts favorable to defendants more frequently than one might expect.

Patent Marketplace Trends

A summary and analysis of 2018 patent marketplace trends and related litigation, including patent transfers from Intellectual Ventures to other NPEs, acquisitions by Fortress Investment Group, and continued attempts by the Electronics and Telecommunications Research Institute (ETRI) to exclusively license patents to NPEs.

The coming report is designed to further a core RPX goal: the promotion of rationality in the patent space through transparency. From larger questions involving venue and NPE litigation, to case-specific issues, RPX leverages its data to help stakeholders across a variety of industries improve both strategic and tactical decision-making. While this report is focused on broader trends and dynamics in the patent system, the real power of RPX’s data platform lies in our ability to provide analytics tailored to the needs and circumstances of individual companies.

The full report will be available in March. For questions in the meantime, contact reports@rpxcorp.com.