Patent infringement litigation by non-practicing entitles (NPEs), also referred to as “patent trolls,” continues to rise dramatically.
In fact, NPEs filed 56 percent of all patent suits, according to a new report by Lex Machina Inc. and the University of California Hastings College of the Law. By comparison, patent trolls filed only 24 percent of patent infringement litigation in 2007.
The new study expanded on the group’s prior research regarding what it calls “patent monetization entities.” The latest report examined 13,000 cases from 2007-2008 and 2011-2012.
Below are several noteworthy findings detailed in the report:
• The number of defendants sued by NPEs decreased slightly from 2011 to 2012, which “may suggest that changes in the joinder rules from the America Invents Act had at least some initial success in pushing patent monetization entities not to cast the net so broadly.”
• Of the parties who filed the greatest number of patent litigations in the years studied, 9 out of 10 are patent monetization entities and only one is an operating company.
• Mechanisms for notifying the public when patents have been asserted in litigation are woefully inadequate. Despite federal requirements, the system was not operative for more than two-thirds of the patents asserted, which “puts small companies at a disadvantage because they cannot easily tell if a patent has been asserted and what territory is being claimed by the patent holder.”
• The newest patents issued are the most frequently asserted in litigation, which “could be an indication that parties are increasingly filing for patents for the primary purpose of assertion.”
This latest report provides new insight into a growing patent trend. NPEs have been a hot topic recently, prompting attention from Congress, the Federal Trade Commission, the U.S. Department of Justice and even the President.
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