Q3 Patent Litigation Update: U.S. Patent Litigation Decreases
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U.S. patent litigation has declined significantly. From 2012 through 2022, plaintiffs filed, on average, 4,700 patent suits. This year, expect to see almost a third less than this historical average.
The District of Delaware is the plaintiffs’ third most popular forum. Unlike the Texas forums, the District of Delaware is preferred primarily by practicing entities. New rules requiring discovery of litigation financing that apply in some cases has likely caused many non-practicing litigants to initiate suits elsewhere.
Plaintiffs have also moved away from the Northern District of California (home to many technology companies). This year, expect only around 120 case filings in the district, compared with a five-year high of almost 330 in 2018.
Beyond district court litigation, patent litigants have continued to use ITC investigations (also down this year) and post-issuance proceedings before the PTAB. The USPTO reported 1,320 IPR petitions in the year ending Sept. 30, 2022, and is on track for about 1,250 this year. This represents a substantial decline from the average of 1,578 filings from FY2017-FY2021.
Patent litigations involving hardware and software continue to dominate patent litigation. But this year, continuing a trend from prior years, the number of healthcare-related district court infringement suits has increased, although without any attendant increase in the number of biological/pharmaceutical-related IPRs.
We expect that the lull in new patent litigation will not outlast 2023. We believe that the decline was partly driven by temporary conditions—financial and legal—whose effect is already waning. In addition, plaintiffs have obtained some significant jury verdicts in their favor this year, which may spur further litigation.