The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation
Lex Machina Inc.
University of California Hastings College of the Law
Joshua H. Walker
Simpson Thacher & Bartlett LLP; Stanford Law School
December 1, 2012
11 Duke Law & Technology Review 357, 2012
UC Hastings Research Paper No. 3
Any discussion of flaws in the United States patent system inevitably turns to the system’s modern villain: non-practicing entities, known more colorfully as patent trolls. For many years, however, discussions about non practicing entities have been long on speculation and short on data.
In 2011 Congress directed the nonpartisan Government Accountability Office to study the effects of non-practicing entities on patent litigation. At the request of the GAO, we collected and coded a set of patent lawsuits filed over the past five years. This article presents our analysis of the data and its implications.
The data confirm in a dramatic fashion what many scholars and commentators have suspected: patent monetization entities play a role in a substantial portion of the lawsuits filed today. Based on our sample, lawsuits filed by patent monetizers have increased from 22% of the cases filed five years ago to almost 40% of the cases filed in the most recent year. In addition, of the five parties in the sample who filed the greatest number of lawsuits during the period studied, four were monetizers and only one was an operating company.
Of additional note, universities, which are sometimes grouped with non-practicing entities on the theory that they do not make products, were almost invisible and accounted for only 0.2% of the cases in our sample. Finally, Patent monetizers were unlikely to advance very far in the trial process, generally settling prior to a summary judgment decision. Our article details these and other results of the study.
Number of Pages in PDF File: 34
Keywords: patent, trolls, non-practicing entities, NPE, patent assertion entities, PAE, America Invents Act, AIA, patent reform
JEL Classification: K00
Date posted: October 8, 2012 ; Last revised: March 12, 2013