A Crystal Ball, Sort Of

While some say that history rarely repeats itself, a look at the past informs our understanding of what is likely to happen in the future. And what we think will happen in the future influences the strategic choices made by a party involved in litigation, particularly patent litigation. This is why a recent report issued by Docket Navigator entitled Patent Litigation Special Report: 2020 Year In Review, which reviews recent trends in patent disputes, is worth considering. Here are some observations:

• Patent litigation filings increased in 2020, which reverses a trend of declining patent cases going back to 2015.
• Patent owners take note: across all venues, the party challenging the patent, including its alleged infringement, is successful more often than not.
• While correlation does not equal causation, there are connections between a particular forum and the likelihood of a particular outcome. For example, the patent challenger is more likely to be successful in the Northern District of California than in the Eastern District of Texas. One explanation is that northern California is home to Silicon Valley’s “Big Tech” companies, which wield significant clout and are the subject of frequent infringement suits by smaller rivals and trolls. By comparison, the Eastern District of Texas remains a risky forum for accused infringers, with average awards there exceeding $1 million.
• The popularity of the Western District of Texas, which stretches from Waco to El Paso and includes the Austin technology hub, has been surging as a forum for patent filings. In particular, many new patent cases are being filed in the Waco Division of the Western District, where U.S. District Judge Alan D. Albright presides. Judge Albright, who took the bench in 2018, has been open about his enthusiasm for handling patent cases and has developed specialized procedures applicable to patent matters that promote expedited and efficient case handling. Judge Albright drew over 17% of patent cases filed in all district courts last year.
• Cases move at different speeds depending on the forum. In the Eastern and Western Districts of Texas, for example, cases move relatively quickly, which supports why these forums are popular. By contrast, a party looking to get a quick determination might want to avoid the Northern District of Illinois.
• The data reflects important trends if the patent case is brought in the U.S. International Trade Commission (ITC). Generally speaking, the ITC is tasked with monitoring claims of unfair competition, including patent infringement, by domestic patent owners against providers of foreign products arriving at U.S. borders. Not surprisingly, outcomes in the ITC frequently favor patentees. Also, the ITC is usually able to process matters more efficiently than a federal district court.
• The report also includes data for proceedings before the Patent Trial and Appeal Board (PTAB), which entertains patent disputes in an administrative forum, including the process known as inter partes review (IPR). Often, patent disputes proceed on parallel tracks, with infringement litigation prosecuted in federal court and the validity of the subject patent reviewed before the PTAB. The trend to utilize the PTAB continues to grow, particularly by those challenging patents who tend to fare better in the PTAB, according to the data.

COVID-19 of course complicates the picture. While filings increased in 2020, it is likely that the number of trials and many case activities fell sharply. However, many of the events recorded by the report were the product of litigation activities that occurred in the months and years leading up to 2020. In other words, the effect of COVID-19 trends will be more fully felt in future years, making predictions more challenging. Still, the data for 2020 and the preceding years is meaningful to litigants’ decision-making moving forward.