PublishedJanuary 27, 2010

Literature Review: Patent Litigation Popularity

Another recent article, cleverly titled, Of Trolls, Davids, Goliaths, and Kings: Narratives and Evidence in the Litigation of High-Tech Patents, seeks to quantify the most popular “type” of patent disputes. Authored by Santa Clara University School of Law Professor Colleen Chien, the article studies case filings from January 2000 to March 2008. Chien investigated the prevalence of a number of common patent litigation scenarios including (but not limited to) suits: a) between two large corporations; b) between an individual inventor and a company; and c) by patent trolls.

After sorting through approximately 2,300 cases, Chien found that 17 percent of all cases involved patent trolls. Expecting a higher percentage in light of the tremendous controversy surrounding patent trolls, Chien realized that these results failed to account for a typical patent troll tactic. Often, patent trolls will sue a number of distinct defendants in a single suit, and it is not uncommon for patent trolls to adopt a shotgun approach, accusing more than a dozen unrelated parties of infringement in a single case. Accounting for each defendant as a “separate” case, Chien found that the percentage of suits involving patent trolls rose to 26 percent. The results of her study also indicated that patent trolls filed 40 percent of all suits involving financial patents.

Furthermore, Chien noted the statistics indicated that lawsuits involving patent trolls were the fastest to be resolved, with the average suit lasting only 9.1 months. By comparison, suits involving two large corporations, or suits involving an individual inventor against a company averaged more than 14 months before resolution. As the author notes, these results support the notion that patent trolls are looking for quick settlements and royalty payments as soon as possible, and are not as interested in the ultimate merits of the case.

While Chien does shed light into the extent of patent troll activity, the results are far from perfect. For instance, the results of the study were limited to only investigating computer hardware, computer software, and financial invention patents. Granted, these categories are three of the most common in terms of litigated patents, but Chien’s study would provide a much more complete view on the effect of patent trolls in litigation, had her results accounted for other areas as well. Still, Chien notes that her study is deliberately conservative in her results, particularly with regards to counting patent trolls. A party was classified as a patent troll only where there was some sort of independent labeling (i.e. in a court document, news report, blog posting etc) to corroborate it, and did not count those individuals suing in their own name, but perhaps on behalf of a patent troll.

Additionally, Chien noted where there was no information about a party available publicly, that party was identified as a “private company”, when in fact they could have been a patent troll in reality. Consequently, the true extent of the patent troll influence is likely to rise, though it is unclear at this point just how far the reach extends. Undoubtedly, we should expect an increase from the 17 and 26 percent of all suits, and 40 percent of financial patent suits as noted prior, once a more thorough investigation is completed.

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