PWC just released its 2011 Patent Litigation Study — a must-read for any retailer regularly facing patent troll litigation. The study tells us somethings that we already: the number of patent suits is increasing and a disproportionate percentage of cases continue to be brought by patent trolls. The study also shows that the average patent plaintiff’s award is trending down. At first glance, that is great news for retailers being hit with more and more patent litigation. But digging just a bit deeper reveals disturbing trends for retailers. While overall awards are down, the volume of suits is trending in the opposite direction — up. And the average awards are down, but trolls tend to get larger awards when they when then do competitor plaintiffs. Of course, the study also finds that troll awards tend to get reduced or reversed more often than average. So, while the magnitude of risk for any one segregated case may be decreasing, three bad things are happening on a macro level:

  1. The number of suits are rising, likely resulting in any given retailer’s aggregate risk for patent infringement rising with the increased number of cases.
  2. While the awards for successful plaintiffs are trending down, the costs of patent litigation remain high.
  3. The corollary to the first two points is that with an increased number of cases, the aggregate legal spend on patent litigation likely trends upward.

Having identified these trends, what can retailers do to counteract them?

  1. Work proactively with business-savvy patent litigation counsel to tie budgets to your risk for a particular case.
  2. Investigate ways that your patent litigation counsel can partner with you to save costs. For example, I often have my clients identify a technical person at the retailer to work with my team. That allows us to short-circuit what can be an expensive learning curve for a new accused technology. It also makes sure that we have client input as we right first draft of claim charts or briefs, as opposed to not incorporating client comments or knowledge until much later in the editing process. This saves time and money for both in-house and outside counsel.
  3. Develop a troll plan. I will write more about how retailers can create troll plans later this year. But however you do it, it is critical to have a plan for responding to troll cases. Not only will it avoid spinning your wheels, it will also save you time and money throughout the process.