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“The report reveals that injunction grants (excluding default judgments) have fallen from a peak of 80 within the interval 2008 to 2012 to simply 36 within the interval 2018 to 2022. That’s a median of simply seven injunctions per 12 months—lower than half the typical within the ancient times.”
If the headlines are to be believed, each side of American life, from farming to football, is beneath menace on account of extreme patent litigation. Whereas these anecdotes could seem compelling, it is very important take a look at the underlying knowledge earlier than drawing any conclusions concerning the state of the U.S. patent system. As an economist and one of many authors of the Federal Commerce Fee’s study of patent assertion entities (PAEs), I perceive the worth knowledge can carry to patent coverage debates, and have additionally seen firsthand the harm evidence-free policymaking has on America’s innovation ecosystem. On World IP Day, Marcum, LLP, a number one accounting and advisory agency, launched a report that examines 20 years of patent infringement selections at U.S. district courts. A cautious studying of their report reveals that not solely is patent litigation not extreme, however patent homeowners battle to implement their patents towards infringers. The report reveals that total patent litigation is declining, injunction grants are low, and litigation by non-practicing entities (NPEs) just isn’t pervasive.
Patent Litigation Is Declining
The primary graph within the report clearly dispels the notion that patent litigation is extreme. It reveals the tendencies over time within the variety of patent grants and the variety of patent infringement complaints filed in U.S. district courts. As seen within the graph, there’s a sharp improve within the variety of complaints filed after 2011 because of the anti-joinder provisions of the America Invents Act (AIA). As astute observers of the U.S. patent system perceive, this improve in complaints doesn’t signify new disputes however merely a separation of defendants into particular person lawsuits thereby mechanically rising the variety of complaints. Subsequently, the decline in complaints noticed after 2013 is extra spectacular than it seems because the decline would have been even higher had been it not for the anti-joinder provision. Even nonetheless, complaints are solely a few third larger than they had been within the interval main as much as the AIA. Moreover, patent infringement complaints as a share of granted patents is low and can also be declining. Marcum reviews this share averaged 1.7% from 2013 to 2017 and is lower than 1% at this time.
Injunction Grants Are Low
The Marcum report offers additional proof of the pernicious impact the U.S. Supreme Courtroom’s eBay choice has had on the flexibility of patent homeowners to implement the exclusionary proper embodied of their patent. Prior research has proven that patent homeowners are much less more likely to search injunctions and people injunctions are much less more likely to be granted following eBay. It must be no shock then that there was a major decline in injunction grants during the last 15 years. The Marcum report focuses on injunction grants excluding default judgments. They be aware that “circumstances with default judgments don’t usually signify contested disputes” because the defendant has failed “to take required actions or reply to courtroom proceedings.” The report reveals that injunction grants (excluding default judgments) have fallen from a peak of 80 within the interval 2008 to 2012 to simply 36 within the interval 2018 to 2022. That’s, in the latest interval, there may be a median of simply seven injunctions per 12 months—lower than half the typical within the ancient times. Along with a low degree of injunctions, enhancement of damages is uncommon. Solely 22% of treatments awards had been enhanced on account of a discovering of willful infringement.
NPE Litigation Is Not Pervasive
If the anecdotes are to be believed, not solely is patent litigation extreme however it’s being pushed by “patent trolls.” Patent trolls or, much less pejoratively, PAEs, are patent homeowners who purchase patents after which assert them towards alleged infringers. The Marcum report casts a broader internet and examines the treatments obtainable to all NPEs which incorporates PAEs but additionally consists of people, universities, and analysis entities. They discover that over the 20 years of their examine, solely 23% of treatments had been awarded to NPEs. Moreover, the impression of eBay has been much more dramatic for NPEs. Because of eBay, injunctions are successfully unavailable to NPEs with solely 12 injunction grants (excluding default judgments) during the last 10 years of the examine. As damages are successfully the one treatment obtainable to NPEs, it’s unsurprising that Marcum finds that median harm awards to NPEs are usually larger than the awards to working towards entities. Nonetheless, the median harm awards to NPEs (excluding default judgments) have declined roughly 25-30percentfrom their peak within the interval 2008 to 2012.
The Marcum report reveals that there’s certainly one thing fallacious with the patent system in the USA but it surely’s not extreme litigation or patent trolls. The true downside is the lack of patent homeowners to implement their rights towards infringers. Given the problem of acquiring injunctive reduction and the restricted enhancement of damages, it’s unsurprising that predatory infringement has develop into a typical enterprise apply when, at worst, all an infringer will be anticipated to pay is an inexpensive royalty and, at finest, nothing in any respect.
Picture Supply: Deposit Photographs
Creator: sputanski
Picture ID: 30368005
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