A new report published today by Lex Machina states that from Silicon Valley to the Supreme Court, patents have become an inescapable part of the corporate and political landscapes in America. This year alone, the U.S. Supreme Court will hear the highest proportion of Intellectual Property cases in history. The patent case load of the district courts has more than doubled since 2008, and verdicts like Apple-Samsung have captured headlines with eye-popping damages. The report also confirms that Apple is still the number one target by patent trolls, which this report creatively calls "Patent Monetization Entities." The more recognized term is that of Non Practicing Entity (NPE).
The report claims that "Plaintiffs filed 6,092 new patent cases in U.S. District Courts in 2013, compared to 5,418 new cases filed in 2012, a 12.4% increase." Lex Machina has been tracking new cases filed on a monthly basis, to study the effects of the America Invents Act and other developments. Although the data so far from 2014 has been less consistent, 2013 saw a clear continuation of the trend towards increasing patent litigation.
Large technology companies bore the brunt of patent litigation in 2014, highlighting the complex web of lawsuits that has embroiled the technology industry in recent years. Apple and Amazon were named as defendants more than any other party – 59 and 50 cases respectively.
Patently Apple covers many of these cases filed each year by patent trolls which you could review at any time in our ongoing Patently Legal Archives.
Others being targeted include Google (39 cases); Dell (38 cases); HTC (38 cases); Samsung (38 cases); Microsoft (35 cases); LG (34 cases) and HP (34 cases).
Every single one of the top ten most prolific filers of patent lawsuits in 2013 was a patent monetization entity. Their filed cases ranged from 137 at the top (jointly filed by ArrivalStar and Melvino Technologies) to 47 new cases filed in the #10 spot. Three companies filed more than 100 new patent infringement lawsuits: ArrivalStar, Wyncomm and Thermolife.
Lex Machina's research shows us that in terms of federal districts, the scene in 2013 was mostly unchanged from 2012. Who was number one? You guessed it; it was "The Eastern District of Texas which narrowly edged the District of Delaware for most new cases filed. As in previous years, these two districts handled a lion's share of patent cases in 2013 – each seeing more than three times the new cases of any other federal district.
Congress is considering proposals that would require patent owners to make clear who really controls the patent, put on hold lawsuits against the users of technology in favor of suits involving the manufacturers, and mandate that the loser in a patent case pay the winner's legal fees except in limited circumstances.
Among the top 10 suing companies last year, only one is outside the software or computer realm. For more details on this subject matter, you can access the full Lex Machina report here.
A Note about Patent Trolls and Action Being Taken
A 2011 study showed that Patent Trolls cost tech companies $29 Billion and a 2012 study made the case that patent trolling was out of control. In the first half 2013, Apple remained the #1 Target of Patent Trolls. In the second half of 2013 Apple remained in the top three.
On December 5, 2013, The US House of Representatives overwhelmingly passed the "Innovation Act" bill on Thursday aimed at discouraging frivolous lawsuits by patent holders. The move was backed by companies like Apple, IBM, Cisco and Google. House Judiciary Committee Chairman Bob Goodlatte (R., Va.) sponsored the bill, which won strong bipartisan support in passing by a 325-91 vote. Goodlatte said his bill "takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation."
In Addition to the new act, the FTC is currently examining the practices of patent trolls or Patent Assertion Entities (PAEs) which are firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency's key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.
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