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Patent Suit Trends Aiding Infringers

A new study of patent litigation finds significant, troubling changes in U.S. patent litigation patterns

Republicans and conservatives tend to react in knee-jerk fashion to civil litigation. We reflexively react as though all civil lawsuits are tantamount to advertising ambulance-chaser lawyers who clog the courts with shady shakedown cases.

While there are plenty of sketchy attorneys playing a numbers game against corporate deep pockets, conservatives should be more discerning, more astute, more prudent, and differentiate between the dregs and the cream.

Indeed, much civil litigation is legitimate. Courts exist in large part to settle legal disputes between private parties.

Patent litigation is one such critically important category of civil lawsuits. Unlike copyright, patent law provides only civil, not criminal, penalties for infringement.

Patent owners’ only recourse to defend their intellectual property is civil litigation. At stake in these cases is the right to exclude anyone else from making, using, selling or importing their invention.

The inventors have already invested much in their invention: Time, money and other resources poured into research and development perfecting a working item that represents newly created property. Then there are the costs of commercializing an invention.

In exchange for exclusivity for a limited time, their patent has disclosed the invention’s details to the degree than someone else could make a functioning model of the invention. The patent (i.e., a deed) is supposed to secure exclusivity, enforceable only by litigation.

The patent litigation study by Marcum reports that patent case filings have fallen over recent years, from 6,497 in 2013 to 3,639 in 2022. This drop has occurred even after the 2011 America Invents Act antijoinder provision forced separation of infringer defendants into their own cases. Compared to the number of patents granted, only 1.7% of patents on average were involved in infringement litigation in 2013 to 2017; that percentage has fallen to a negligible 1%.

Damages awards in patent infringement cases have dropped, as well. Median damages that courts award in patent litigation only amount to $3.7 million. In just 22 percent of cases with damages awarded do court levy enhanced damages against infringers for willfulness.

Marcum confirms that awards of permanent injunction are less likely now. Courts awarded patent-owner plaintiffs 80 injunctions between 2008 and 2012—after the Supreme Court’s infamous 2006 eBay v. MercExchange ruling. Injunctive relief was granted in a mere 36 cases between 2018 and 2022.

Marcum's assessment also puts the lie to the patent infringers’ lobby’s “patent troll” propaganda--as though there were actually all these bad actors driving up a patent litigation explosion and preying on Big Tech “innovators.” In fact, nonpracticing entities, which are innovators that don’t make their own inventive products (e.g., R&D firms that, like most of the iconic American inventors, license their patents to manufacturers, and universities) were awarded only 23% of remedies against patent infringers from 2013 to 2022, including just 12 injunctions to NPEs.

These results demonstrate that enforcing patent rights of exclusivity through civil litigation today holds much less hope of bringing patent owners justice. U.S. patents have lost value while predatory infringement has put the gangsters in charge of IP. This development threatens property rights and U.S. innovation.

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