Unified Patents

View Original

Patent Dispute Report: Q3 2023 in Review

Overview

District litigation continues to slump with the notable absence of IP Edge and Cedar Lane. The multiple third-party funding disclosure requirements and decrease in filings show that those entities are rethinking their strategies. This has shifted the venue of choice between the Western and Eastern Districts of Texas, which are only separated by five cases.


Highlights:

  • District court litigation is projected to be down by 14% this year, with only 11 cases filed by IP Edge and 18 by Cedar Lane.

  • IP Edge has recently resurfaced with a new entity, Communication Advances, with a focus on video codecs. 

  • Jeffrey Gross entities, recently linked to Patent Armory, is the most litigious entity thus far of 2023 with 113 assertions. 

  • The Western District of Texas has a slight edge over the Eastern District of Texas, but only by 5 cases, for the top patent venue. 

  • The number of US patents and patent applications sold in the 2nd quarter of 2023 surged by 345% year-over-year, which is due primarily to the BlackBerry sale.


Figure 1: As noted in the prior report, filings are down mainly due to the absence of IP Edge filings. With nearly 500-600 filings a year by IP Edge, it is no surprise that litigation continues to decline this quarter as before. PTAB Filings and Reexams appear to be on track with their 3-year average.

See this content in the original post

Figure 2: District court filings are at the lowest level since 2018 with only 722 cases in Q3. Again, this can be attributed to the fact that IP Edge has been less eager to file this year.

See this content in the original post

Figure 3: With the Advance Notice of Proposed Rulemaking (ANPRM) for potential PTAB reforms making its way through, it is no surprise that PTAB filings continue to be down as uncertainty looms this quarter.

See this content in the original post

Figure 4: NPE (PAE)s are responsible for 58% of all suits brought in 2023.

See this content in the original post

Figure 5: The Western District of Texas continues to be the most popular venue in 2023, with Delaware sliding to third place, likely due to the disclosure requirements regarding financing. However, the Eastern District of Texas had only five fewer cases than its Western counterpart.

See this content in the original post

Figure 6: High-Tech litigation dominates district court and PTAB litigation in 2023.

See this content in the original post

Reexaminations

Figure 7: 235 Reexaminations have been filed so far in 2023 - continuing to be on pace to match previous years.

See this content in the original post

Figure 8: In 2023, NPEs account for 50% of patent owners challenged in reexamination.

See this content in the original post

Figure 9: New reexaminations tend to challenge NPE owned patents.

See this content in the original post

Figure 10: Unified Patents has been the top public requester in 2023. Unified attempted to identify the requester, and when no identified party was named, the law firm became the requester.

See this content in the original post

Litigation Investment Entity Tracker (LIEs)

Figure 11: Q3 2023 seems to be tracking a new normal of 146 cases for a 3-quarter average of known financed cases, with the lack of cases from IP Edge and Cedar Lane.

See this content in the original post

Figure 12: IP Edge continues to be notably absent from the Top 10 Most Litigious LIEs, with Jeffrey Gross entities leading the charge in 2023.

See this content in the original post

Figure 13: With court-order disclosure requirements and potential legislative changes, LIEs have responded differently. IP Edge has virtually ceased filing, with only 11 cases this year, while Jeffery Gross keeps filing. 

See this content in the original post

Figure 14: The number of US patents and patent applications sold in the second quarter of 2023 surged by 345% year-over-year, although the number of deals has remained relatively flat, reports Allied Security Trust, a patent defensive organization. The surge is due to 9,702 US patent assets involved in the BlackBerry sale to Key Patent Innovations.


District Court

Figure 15: NPE litigation is still projected to decrease by 25.8% with the lack of filings from LIEs like IP Edge. Operating Company litigation seems to be on par with previous years.

See this content in the original post

Figure 16: Nine out of the Top Ten asserting entities were NPEs. The only operating company is BTL Industries, a medical manufacturer with non-invasive equipment. Patent Armory (a Jeffrey Gross entity) has been the most active.

See this content in the original post

Figure 17: The majority of top defendants are High-Tech companies.

See this content in the original post

Figure 18: Nearly 57% of litigation involves the hi-tech industry, while medical-related suits remain at about 15%.

See this content in the original post

Figure 19: NPEs targeted high-tech companies 95% of the time in 2023, while non-NPEs targeted high-tech companies only 14% of the time.

See this content in the original post

Figure 20: NPEs are still responsible for 87.4% of litigation in the High-Tech industry. 

See this content in the original post

PTAB Disputes

Figure 21:  PTAB filings are projected to be down by about 15%, with the ANPRM currently under review.

See this content in the original post

Figure 22: Over 68% of all PTAB petitions filed in 2023 involved High-Tech companies.

See this content in the original post

Figure 23: Approximately 54% of all AIA challenges filed in 2023 involved High-Tech companies petitioning NPE-controlled patents.

See this content in the original post

Figure 24: IPRs remained the most popular AIA proceeding, claiming 86.2% of all 2023 post-grant proceedings. Reexaminations were the second most popular, accounting for nearly 11.3% of all patent challenges at the USPTO.

See this content in the original post

Figure 25: High-Tech companies such as Samsung, Google, Meta, Cisco, and Apple rounded out the list of Top Petitioners this quarter.

See this content in the original post

Figure 26: While High-Tech patents are the primary focus of the PTAB, medical/pharma patents are being increasingly challenged. 

See this content in the original post

Unified Patent Court

Figure 27: The UPC has finally begun to take effect, and companies such as Panasonic, Huawei, Decxom, and Phillips have comprised the claimants.


Definitions

Sectors

High-Tech = Technologies relating to Software, Hardware, and Networking

Medical = Technologies relating to Pharmaceuticals, Medical Devices, Health Related Technologies

Other = Technologies relating to Mechanical, Packaged Goods, Sporting Equipment and any other area outside of high-tech and medical patents.

Entities

Non Practicing Entity (NPE) = Company which derives the majority of its total revenue from Patent Licensing activities.

Operating Company or Op. Co. = Company which derives most of its total revenue from Product Sales or Services. Could be an SME or a large company.

Other Entity = Universities / Non-Profits / Government / Non-Governmental Organizations (NGOs)

NPE (Patent Assertion Entities) = Entity whose primary activity is licensing patents and acquired most of its patents from another entity

NPE (Small Company) = Entity whose original activity was providing products and services, but now is primarily focused on monetizing its own patent portfolio.

NPE (Individual) = Entity owned or controlled by an individual inventor who is primarily focused on monetizing inventions patents by that individual inventor.

NPE Aggregator = Entity that has control or ownership over two or more entities. 

Litigation Investment Entities = Evidence of any third party with a financial interest, other than the assertors.


Venues

CACD = Central District of California

CAND = Northern District of California

DED = Delaware

NJD = New Jersey

NDIL = Northern District of Illinois

SDNY = Southern District of New York

TXED = Eastern District of Texas

TXWD = Western District of Texas

UPC = Unified Patent Court

Methodology

This report includes all District Court and PTAB litigations between January 1, 2015 and September 30, 2023.

Total number of reported cases can vary based on what is included. Unified made its best attempt to eliminate mistaken, duplicative, or changes in venue filings, hence the totals may vary slightly compared to other reporting entities. Statistics include litigations initiated by NPEs or Declaratory Judgments (DJs) initiated by operating companies against NPEs.

Unified strives to accurately identify NPEs through all available means, such as court filings, public documents, and product documentation.


Copyright © 2023 - Unified Patents, LLC. All rights reserved.