Patent Trolls Lead Patent Infringement Cases in 2013: Report

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Driven by patent trolls, patent infringement cases increased by 25 percent in 2013 to a record 6,500 filings, according to a report released Thursday by PricewaterhouseCoopers (PWC). The “2014 Patent Litigation Study” (PDF) says the total number of patents granted also increased by 7 percent to almost 300,000 last year.

The PWC report calls 2013 “a moderating year in patent infringement litigation” because median damages awards fell. Over the past four years, median damages were $4.3 million, but damages awarded to non-practicing entities, otherwise known as “patent trolls,” were three times higher on average.

The telecommunications industry topped all other sectors in median damages awarded at $22 million.

The report refers to an RPX Corporation report which says that patent trolls filed 67 percent of infringement cases in 2013, after they were responsible for only 28 percent in 2009. PWC found that only 20 percent of decisions in 2013 involved patent trolls, “reflecting the much higher tendency for NPE-filed cases to settle or be dismissed.”

Non-practicing entities were successful in 25 percent of filings in 2013, versus about 35 percent for practicing companies.  Once they reached trial, however, each won about two-thirds of their cases.

Some patent infringement cases are generally seen as legitimate grievances between rival businesses, as was the case in a recently decided battle over firewall technology between Juniper Networks and Palo Alto Networks. However, many cases including non-practicing entities (other than universities and innovative individuals) are widely considered spurious, and the PWC report refers to the efforts The White House has undertaken to curb them.

An April Supreme Court decision could also reduce patent trolling, by allowing judges to force companies to pay the defendants legal fees if they lose what Forbes calls “an objectively baseless claim in bad faith.” This “loser pays” provision is credited for the lower number of patent troll filings in Europe.

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  1. So is government action ever going to be taken to limit patent trolls? People act like these trolls are helping the inventors make money, but just look at most of the "inventions"... Now, it seems some progress is getting made, but mainly from the private sector, with more investigation of patents before they're issued, defensive patent pools, etc. There needs to be some sort of legislation though, or we're just going to be stifling innovation as legal defense for essentially meaningless patents is getting ridiculous.