2011 patent litigation study

October 2011
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2011 patent litigation study

At a glance

One of the most widely discussed topics in the patent reform debate, which culminated in the September 2011 "America Invents Act," has been assessing damages. This PwC study looks at past patent damages awards.

More than a decade of discussion and debate over patent reform culminated on September 16, with President Obama signing the "America Invents Act" into law. One of the most widely discussed topics in the patent reform debate had been the issue of damages.

Significantly, the America Invents Act does not contain any language regarding the calculation of damages in patent infringement matters. This represents a shift from prior drafts, which incorporated substantial language addressing damages. The absence of any reform guidance in this area suggests that Congress believes the subject of patent damages is best left for the courts to address and regulate. Recent decisions, particularly from the Court of Appeals for the Federal Circuit, demonstrate that the courts are continuing to focus on linking damages awards to appropriate evidence regarding the economic value contributed by the patented technology.

Reflecting these developments, PwC maintains a database of patent damages awards (from 1980 through 2010), collecting with specificity information about patent holder success rates, time-to-trial statistics, and practicing versus nonpracticing entity ("NPE") statistics (all from 1995 through 2010). This year's study adds industry classification and expanded NPE segmentation analyses. Based on this study, several observations can be made to help executives, legislators, and litigators assess their patent enforcement — or defense — strategies, as well as the impact of NPEs.