Study Confirms Impact of Non-Practicing Entities in US Patent Litigation

For several years, observers of patent litigation trends in the U.S. have noted the apparent increase in patent infringement cases filed by so-called "Non-Practicing Entities" (aka patent "trolls"). Criticism of NPE enforcement activity was a major force behind litigation provisions in the America Invents Act.

A group of researchers now have published a report, based on research requested by the U.S. Government Accounting Office, to gauge the  true impact of NPE activity. See Sara Jeruss, Robin Feldman, and Joshua Walker, "The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation" (forthcoming in the Duke University Law School Law and Technology Review). A copy is available on SSRN.

The study documents the rise of "Patent Monetization Entities," a category that includes various plaintiffs whose core activity is creation of an income stream from the robust patent market, as opposed to exploiting their patents as an operating company.  The study concludes that for 2007-2011:

[L]awsuits filed by patent monetizers have increased significantly over the five ‐ year period. The sheer number of cases has increased, as well as the percentage of overall case filings represented by monetizers. In other words, lawsuits filed by patent monetizers are on the rise, while lawsuits filed by operating companies have fallen. Specifically, lawsuits filed by monetizers increased from 22% of the cases filed five years ago to almost 40% of the cases filed in the most recent year. In addition, monetizers were also heavily represented in the list of those who filed the greatest number of lawsuits. Of the 5 parties in the sample who filed the greatest number of lawsuits during the period studied, 4 were monetizers. Only one was an operating company. (at 5).