Every retailer knows that patent litigation is growing rapidly. And every retailer knows that more and more of that litigation is created by trolls. A recent study analyzes a set of 500 cases, using data from Lex Machina - The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation. The study looks at 500 cases between 2007 and 2011, determining:
- Troll litigation is on the rise, from 22% of patent cases in 2007 to 40% of cases filed in 2011.
- Four of the five most active patent plaintiffs are trolls.
- Trolls rarely get a merit-based resolution or perhaps it is better said that most defendants settle for cost of defense amounts rather than litigating to a decision.
What can retailers take away from this study?
- The old saw that defendants are not ready to litigate applies at least equally in both directions.
- One way for retailers, and defendants generally, to generate leverage is to show a willingness and (most importantly an ability) to drive cases effectively toward trial, as well as toward substantive decision points like summary judgment.
- With so many cost of defense settlements, it is doubly critical to drive down defense costs. That can come from alternative fee arrangements and/or effective partnering between in-house and outside counsel.
- Another key cost reduction strategy should be focusing upon driving down discovery costs in any way possible - avoiding non-strategic discovery disputes, reducing discovery scope, (by agreement or by law), and by outsourcing or by inhouse / outside partnering.
Finally, a thank you to my friends at IP Wise and the Brann law firm for identifying the study.