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PwC study chronicles patent ebb and flow

By Rob Starr, Content Manager

PwC’s 2016 Patent Litigation Study  finds the number of patent cases filed declined by 2% in 2015 paralleling patents granted declining for the first time since 2008. On the flipside,  the report  has the 2015 annual median damages awards at the highest point in a decade. Chris Barry, PwC, Partner Forensic Services, supplied some insights into the ebb and flow of patent litigation.

What’s to be made of the fact patents granted declined for the first time since 2008 while the median damages awards increased?

The number of patents granted may be down because either the PTO is scrutinizing patents more carefully, or fewer claims are being filed in the post-Alice v. CLS Bank era. It’s unclear why median damages have risen, but it could be due to random fluctuations in case decisions by year. Some posit that given the increased risks of litigation, perhaps only bigger, more serious cases are going the distance.

What were the big takeaways when it comes to industry trends?

The prevalence of industries’ patent litigation is similar to the past, with slight increases in software and bio/pharma cases, and decreases in industrial/construction and medical device cases. Success rates are fairly consistent across industries, whereas median damages vary dramatically.

What’s relevant as far as appealed cases are concerned?

Here’s what you should note:

  • 80% of district court cases are appealed
  • 53% of those cases are modified in some regard by the Federal Circuit
  • There are similar appeal and modifications statistics for NPEs and practicing entities.

    Chris Barry

    Chris Barry

What are the other bigger takeaways?

Additional takeaways include:

  1. Patent cases filed continues to moderate, probably due to popularity of PTAB proceedings
  2. The use of juries as trier of fact continues to increase, now at 75%.  This is because compared to bench outcomes, juries yield higher success rates (20% premium in last 5 years) and much higher damage awards (over 16X in last 5 years).
  3. Fee shifting is more likely now (41% of the time), following the Icon and Allcare decisions from Supreme Court in 2014.
  4. NPEs continue to have mixed results compared to practicing entities – success rates lower by 10%, but median damages almost triple.  Universities / non-profits are by far the most successful NPE plaintiffs.

What’s in the future?

Patent litigation will continue to be robust, although many cases will initially take a detour through the PTAB process .  The cases making it to trial will tend to be higher stake, and will take 2.5 or more years from filing to decision; longer if they’re high dollar value cases. NPEs will continue to be active participants, although they may approach cases more thoughtfully given the potential for paying defendant’s costs.  Juries will continue to hear 3/4 of patent cases, because of their favorable rulings.  Finally, unless legislation occurs, venue-shopping will still be popular, with actions increasingly concentrated in a few select districts, including ED-TX, DE and ND-CA.


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