Patent Litigation Really Is Falling


Joseph Schuman
October 10, 2014
What goes up...

All the historians, economists and patent-system veterans claiming the surge in patent lawsuits that followed enactment of the American Invents Act was temporary now have some evidence to back up their claims, and from an interesting source.

Lex Machina, the Palo Alto-based patent-litigation data mining firm, reports that 329 plaintiffs filed new federal patent cases in September, down 40 percent from the same month last year. Moreover, the firm says, the number of patent suits has been steadily falling for nearly half a year, with new case totals over each of the past five months consistently lower than the same periods in 2013.

“Since 2011, new filings have generally decreased during the summer and increased towards the end of the year, but filings this year have not so far shown any sign of bouncing back upwards,” Lex Machina said in a statement about its findings.

Mark Lemley, the Stanford law professor who cofounded Lex Machina – and a writer who often pens studies critical of patent rights – attributes the most recent drop to the Supreme Court’s decision in Alice v. CLS Bank. The Alice ruling reiterated that abstract ideas cannot be patented, and patent-system critics have repeatedly cited it when assaulting the existence of software patents. Yet the justices quite clearly said they weren’t raising doubts about the validity of software patents in general.

Lemley’s explanation, that the Alice decision is deterring patent holders from filing lawsuits to protect their IP, doesn’t seem to explain the drop-off in federal lawsuit filings that began before Alice was handed down.

Incidentally, we remind readers of this post, which includes a chart showing that the number of lawsuits filed per number of patents granted has remained in a historically consistent range of 1 percent to 2 percent over recent decades.

And both the spike in patent lawsuits and the return to a normal pace were pretty well explained and foretold in last year’s patent litigation study from the General Accountability Office. As this post reported, the GAO said the increase was a statistical bump influenced by enactment of the 2011 AIA. And as we wrote last year, impending passage and implementation of the AIA appears to have artificially inflated the total number of patent infringement suits, in part because patent owners who used to be able to include multiple alleged infringers in one lawsuit must now file multiple suits.

Even so, patent litigation rates seem to be returning to their historical norm. Policy makers considering what could be radical changes to patent law should probably keep that in mind. 

Lemley himself described the current legislative state of play well in an interview with IAM magazine, when it asked him whether Congress should hold off enacting new law until the effects of recent court decisions become clearer. 

“I think the need for legislative reform is a lot less right now than it was a year ago,” Lemley said, “and it probably makes sense to wait a bit and see how these cases play out and what the new dynamic looks like before we try to rewrite the rules.”