On October 15, 2018, Unified added a $2,000 contest to PATROLL seeking prior art for US Patent No. 6470345, owned and asserted by Uniloc USA, a well-known NPE. The '345 patent, titled "Replacement of substrings in file/directory pathnames with numeric tokens," generally relates to a system and method for a file directory system. The contest will expire on January 14, 2019.
On October 18, 2018, Unified added a $1,000 contest to PATROLL seeking prior art for US Patent No. 9928044, the latest patent asserted in a wave of litigation filed by Express Mobile Inc. (an NPE). The '044 patent generally relates to a method and system for displaying a website on a mobile device. The contest will expire on January 18, 2019.
On October 17, 2018, the Board issued an order terminating IPR2017-01467 pursuant to a joint settlement request filed by Unified Patents and Global Equity Management (SA) Pty. Ltd. ("GEMSA") (an NPE). U.S. Patent 6,690,400, directed to a graphical user interface (GUI) displaying graphics representing various partitioned storage devices in a computer, has been asserted in multiple district court cases, 35 of which were pending at the time of settlement.
Patent litigation in Q3 2018 remains close to the levels seen at the district court and PTAB in the first two quarters of 2018, even as the number of new disputes has steadily declined on a year to year basis. The proportion of NPE filings in 2018 remains high, especially in the High Tech sector where 87 percent of new district court cases involved NPEs. The NPE threat is especially concerning for small and medium sized businesses (“SMEs”) as over 80 percent of all infringement actions filed against and SME were NPE-related. Because SMEs generally lack the resources to challenge bad assertions, the majority of these cases end with settlements rather than protracted and expensive litigation.
Highlights for Q3 2018:
For Q1-Q3 2018, the volume of patent litigation at district court and the Patent Trial and Appeal Board (PTAB) is approximately 15% lower than the volume of new cases for the same period in 2017.
High Tech companies, both large entities and SMEs, face a disproportionate number of NPE-related threats as compared to other sectors.
Assuming current trends, the total number of new cases in 2018 is estimated to be approximately 3,380 for the district courts and 1,655 at the PTAB.
Most of the data for this report is available for free on Unified’s Portal along with additional resources such as the best Petitioner/Patent Owner law firms, APIX and CITX patent ratings, and USPTO Examiner reports.
Figure 1: Patent litigation in 2018 has steadily declined since 2015. Under the current trend, the total volume of patent litigation for 2018 is expected to be slightly lower than 2017. Complete district court case information available here.
Figure 2: Parties filed approximately 850 new patent cases in District Court during Q3 2018, slightly above the number of filings in the previous quarter. View all cases in Portal.
Figure 3: In 2018, the PTAB remains the most common venue for patent disputes overall, responsible for more filings then the top three district courts combined. Although the total number of new filings in ED Texas has decreased post-TC Heartland, NPEs still account for 80% of cases in this district. More info on ED Texas filings available here.
Figure 4: At both the PTAB and the District Court levels, the High Tech industry continues to see the largest volume of patent disputes. View all High Tech cases here.
Figure 5: The proportion of NPE filings decreased in 2018 compared to previous years, however NPE related filings remain high. Compare all NPE and Op Co litigation here.
Figure 6: Between Q1 2018 and Q3 2018, the proportion of NPE-related cases per quarter has remained steady at approximately 60% across all industries. View all cases in Portal.
Figure 7: The volume of High Tech cases at district court increased approximately 7% between Q2 and Q3. View all High Tech cases here.
Figure 8: For Q1 - Q3 2018, NPEs accounted for more than 85% of all patent suits enforcing High Tech patents. View all High Tech cases here.
Figure 9: 87% of all High Tech patent litigation in 2018 involved NPEs. Over 50% is attributed to Patent Assertion Entities (i.e., entities that purchase patents for the primary purpose of monetization). View all High Tech cases here.
SME Defendants in District Court
Unified is committed to protecting innovators and entrepreneurs by eliminating bad patent assertions against SMEs. Studies have shown that SMEs invest in less R&D and become less innovative after being sued. As seen in the figures below, NPEs have continued to use district court as a means to extract payments from SMEs in 2018.
Figure 10: About 300 new lawsuits were filed against Small/Medium Entities in District Court between July 1 and September 30 with NPEs accounting for approximately 40% of these new cases. View all NPE cases here.
Figure 11: Between Q1 - Q3 2018, NPEs accounted for over 80% of new district court cases against SMEs in the High Tech industry. View all High Tech cases here.
Figure 13: The PTAB received about 400 new petitions in Q3 2018. View this chart in the Portal.
Figure 14: While patent litigation in 2018 is down compared to 2017, the number of new cases per quarter has remained steady. Full PTAB case data available here.
Figure 15: Approximately 64% of PTAB petitions filed in Q3 2018 challenged High Tech patents. View High Tech PTAB cases.
Figure 15: About 60% of High Tech patents challenged at PTAB were owned by NPEs. View High Tech PTAB cases.
Figure 16: Inter partes reviews (IPRs) continue to dominate all PTAB proceedings. View all IPRs here.
Figure 17: Apple and Samsung were the first and second most frequent IPR filers in 2018, respectively. All PTAB top parties are available here.
Figure 18: For Q1 - Q3 2018, 8 out of the 10 most-challenged Patent Owners at PTAB were NPEs. Most of these NPEs are well-known Patent Assertion Entities. All PTAB top parties are available here.
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.
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.
DED = Delaware
TXED = Eastern District of Texas
CAND = Northern District of California
CACD = Central District of California
NJD = New Jersey
NDIL = Northern District of Illinois
SDNY = Southern District of New York
TXND = Northern District of Texas
This report includes all District Court and PTAB litigations between January 1, 2014 and September 30, 2018.
Total number of reported cases can vary based on what is included. Unified made its best effort 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.
On September 26, 2018, Unified filed a petition for inter partes review (IPR) against U.S. Patent 6,232,539, owned and asserted by MOAEC Technologies, an NPE. The ’539 patent, directed to a music organizer and entertainment center, has been asserted against companies such as Spotify, SoundCloud, and Deezer.