We view 2012 as a banner year for patent infringement litigation. Massive damages awards made headlines. The 2011 America Invests Act (AIA) began making its impact. The influence of nonpracticing entities (NPEs) continued to grow. The number of patents granted and litigations filed maintained their sharp upward trajectory.
Prior to 2012, only three patent cases eclipsed the $1 billion mark in damages awarded. But last year alone, three cases, tried before juries in separate districts, resulted in awards of $1 billion or greater. Additionally, NPEs continued to play a significant and growing role in patent litigation in 2012. Our analysis shows a significant disparity in median damages awarded to NPEs versus practicing entities. Over the last 12 years, the median damages award for NPEs has averaged twice the median award for practicing entities.
The AIA also made an impact in 2012. The ‘anti-joinder’ provision of the AIA, which constrained the number of defendants that could be named in a single lawsuit, resulted in an increase in the overall number of suits, particularly those filed by NPEs. The AIA also largely ended the phenomenon of false marking ‘qui tam’ actions that had become so prevalent in 2010 and early 2011.
Recognizing these developments and business and civic leaders’ continuing deep interest in intellectual property matters, PwC maintains a database of damages awards and other case information related to identified patent infringement decisions. We collect data related to patent holder success rates, time-to-trial statistics, jury versus bench comparisons, and practicing versus nonpracticing entity (NPE) statistics from 1995 through 2012. This year’s study also includes statistics by judge. Our analysis yields a number of observations that can help executives, legislators, and litigators assess their patent enforcement or defense strategies, as well as the impact of NPEs.