PWC’s 2012 Patent Litigation Study is out and it tells an interesting story.  Cases are up, but median damages are down.  Here are some of the key findings:

  • Patent litigation filings hit a record 4,015 case filings in 2011.  I would expect an even greater increase in suits filed in 2012, the first year of the AIA’s joinder restriction.
  • Median awards to trolls are significantly greater - nearly double over the last decade - than awards to practicing entities.
  • Median damages awards have decreased dramatically from the first half of the 2000’s to the second half - from $8.7M to $4.0M.
  • The 2000’s saw a significant up-tick in the use of juries.  55.2% of trials in the 2000’s were to juries.
  • While jury win rates are slowly decreasing, over the last six years plaintiffs have won 76% of jury trials.
  • Plaintiffs’ bench trial win rates increased to 59.3%.
  • Median jury awards are far larger than judges’ awards - $8.7M compared to $400K.
  • More than 80% of awards are reasonable royalties.
  • A larger percentage (58.4%) of troll cases are decided by summary judgment than practicing entity cases (52.3%).
  • Trolls have significantly lower success rates (approximately 15%) in technology sectors relevant to retailers.
  • Time to trial is staying relatively steady at about 2.5 years nationwide.
  • 38% of decisions involving trolls were concentrated in five districts: E.D. Tex.; N.D. Ill.; S.D. New York; N.D. California and D. Delaware.

What do retailers take away from these trends?

  1. Patent litigation, and troll litigation, continues to grow.  The trend of increased cost and distraction from troll cases is not slowing down.
  2. The decrease in median damages may suggest that judges and juries are taking a harder look at shoot-for-the-moon damages demands.  This may suggest that all of the publicity from patent reform is positively impacting at least damages awards.
  3. Summary judgment is a strategy valid with almost 60% of cases resolved on summary judgment.