Patent Pilot Program Could Cut Litigation Costs

Patent Pilot Program Could Cut Litigation Costs

In 2011, Congress created a program designed to streamline district court patent cases. One aim of the Patent Pilot Program was to reduce the high cost of patent litigation. The idea was to foster a greater level of specialization in technical and procedural issues unique to patent matters among certain judges. The rationale was simple: judges who more regularly hear patent cases will be better equipped to efficiently and correctly resolve complex issues—such as the meaning of technical terms during claim construction.

The natural question: Is it working? A government report on the program is not due until 2016. But, based on three years of available data, it appears that the program is achieving at least some of its goals.

By way of background, the Patent Pilot Program modifies case assignment to allow judges who have identified themselves as “patent judges” to accept patent matters from judges who opt to trade away such cases. “Non-patent judges” in participating districts have the option to transfer a new patent matter to a patent judge within 30 days of the initial assignment. The patent judge to whom the case is randomly assigned may in turn reject the case within five days of the reassignment. If all of the patent judges in the district reject the case, it returns to the judge to whom it was initially randomly assigned. Patent judges are not permitted to transfer patent cases that land on their docket through the normal course of random case assignment. The mandatory five- and 10-year reports referenced above will analyze, among other things, whether patent judges are reversed less often than their peers on substantive patent law issues and whether they dispose of patent cases faster than non-patent judges.

Sufficient data is available to make a preliminary assessment of whether: (1) patent judges have disposed of patent matters more quickly than non-patent judges; (2) non-patent judges have been transferring patent cases to patent judges; and (3) more patent cases have been filed in the 14 participating jurisdictions since the program was implemented. The statistics here are based on data from the 14 patent pilot program jurisdictions: Eastern District of New York, Southern District of New York, Western District of Pennsylvania, District of New Jersey, District of Maryland, Northern District of Illinois, Southern District of Florida, District of Nevada, Eastern District of Texas, Western District of Tennessee, Central District of California, Northern District of California and Southern District of California. Briefly, patent judges appear to reach the milestones of claim construction and trial somewhat more quickly than their peers, non-patent judges have participated in the program by transferring cases and new patent case filings are slightly up in the 14 patent pilot jurisdictions.

The most important question is addressed first: whether cases pending before patent judges progress more quickly than cases before non-patent judges. The short answer is: yes. The dockets of cases transferred to patent judges show an average time to claim construction, summary judgment and trial of 12.8 months, 14.2 months and 17.3 months, respectively. By comparison, a study by LegalMetric showed a national average time to claim construction of about 23 months. The federal judiciary reports a median time to summary judgment of 12.6 months for all matters, including non-patent cases (an analysis of time to summary judgment in patent cases only is currently not available). Finally, the 2013 PwC Patent Litigation Study shows a median time to trial for all patent cases of approximately 28 months. Thus, cases before patent judges appear to be moving somewhat more efficiently to claim construction and trial.

Next, the data shows that non-patent judges are availing themselves of the opportunity to transfer patent cases. Figure A shows that since the program was implemented, 74 percent of patent cases in the participating jurisdictions have been assigned to patent judges, either randomly or through transfer. In several jurisdictions—Western District of Pennsylvania, District of Nevada, Eastern District of Texas, Northern District of Texas, Western District of Tennessee and Southern District of California—more than 80 percent of patent cases were ultimately assigned to patent judges.

Figure A

Figure B breaks down the number of cases pending before patent judges shown in Figure A to arrive at the percentage of cases that were assigned to those judges through transfer. Figure B shows that an average of 17 percent of cases assigned to patent judges were transferred from non-patent judges.

Figure B

The available data also shows that a greater percentage of patent cases are filed in pilot program jurisdictions than non-participating jurisdictions. Figure C shows the concentration of patent cases filed in pilot program jurisdictions compared to the entire federal judiciary. Indeed, in 2009, prior to enactment of the patent pilot program, 50 percent of all new patent cases were filed in the 14 pilot jurisdictions. As shown in Figure C, that percentage rose after the institution of the pilot program. For example, 55 percent of patent cases filed in 2012 were filed in the 14 pilot jurisdictions. In 2013, however, the percentage of patent cases filed in pilot jurisdictions dropped to 51 percent, which resulted from a decrease in the number of patent case filings in several of the larger pilot program jurisdictions—Southern District of New York, District of New Jersey, Northern District of Illinois and Northern District of California. Thus, the percentage of filings in the pilot jurisdictions is up slightly since the program was implemented, suggesting that litigants may prefer those jurisdictions.

Figure C

In sum, the early data shows that patent pilot program jurisdictions may have a slight edge on other jurisdictions in more rapidly moving cases to claim construction and trial. Additionally, judges in pilot jurisdictions appear to be opting to transfer some, but not an overwhelming number, of patent cases to pilot program judges. Thus, the Patent Pilot Program appears to be achieving some of the goals of concentrating patent cases with “specialist” judges and improving the ability of those judges to quickly adjudicate such cases.

Margaret A. Scoolidge is an attorney at the law firm of Fitzpatrick, Cella, Harper & Scinto in New York. Her practice focuses on complex patent litigation. She represents clients in the pharmaceutical, chemical, biotechnology and medical device arenas. She is a member of the New York Intellectual Property Law Association and the American Intellectual Property Law Association. Peter Scoolidge is an attorney in the New York office of Fisch Sigler. He is a seasoned intellectual property litigator who has been part of winning trial teams.

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