In Patent Litigation, Study Says, Plus Ça Change

In Patent Litigation, Study Says, Plus Ça Change Jason Doiy Mark Lemley

The patent litigation playbook has changed dramatically over the past two decades. But according to a trio of academics and patent experts, the average win-loss record has barely budged.

That’s one of the conclusions in a new paper by John Allison of University of Texas, Mark Lemley of Stanford Law School and David Schwartz of Chicago-Kent College of Law. The professors say they spent “hundreds of hours” investigating what happened in every patent case filed in 2008 and 2009 and decided between 2009 and 2013, and then they compared their findings with a similar study two of them published 16 years ago. The finished product is Understanding the Realities of Modern Patent Litigation, which will be published in the Texas Law Review.

Allison, Lemley and Schwartz found that patent-holders “lose nearly three-quarters of the time when the court definitely resolves the merits.” When cases go to trial, on the other hand, patent-holders win about 60 percent of the time. Related studies over the years have reached similar conclusions. (In addition to his academic position at Stanford, Lemley has an active litigation practice at Durie Tangri.)

What has changed is the way to invalidate patents. Twenty years ago, defense lawyers hardly ever argued that the asserted patents were “indefinite” and therefore shouldn’t have been granted in the first place. Because of an appellate decision that makes it easier to prove software patents indefinite, indefiniteness has now become the most frequently raised defense, the authors found, eclipsing obviousness and lack of enablement. The U.S. Supreme Court is now considering whether to relax the standard for proving indefiniteness, so the defense could become even more common.

Another once-rare defense—that the subject matter of a claimed invention isn’t eligible for patenting under Section 101 of the Patent Act—has also become dramatically more popular—not to mention successful. We first wrote about the emerging trend of Section 101 dismissals back in 2012. The Supreme Court is poised to rule soon on that issue as well, in Alice Corporation v. CLS Bank International.

The report includes other notable findings for patent litigation junkies. Among them: Forum-shopping can pay dividends for both plaintiffs and defendants. And foreign inventors “do just fine” when they sue in the U.S. “This result was frankly surprising to us,” the authors wrote. “It may suggest that there is no bias against foreign inventors.”

But the bottom line, in an era when patent trolls and software patents have dominated debate over patent litigation, is that the odds for most patent plaintiffs are stubbornly consistent.

“Much has changed about patent law, but the overall dynamics of patent litigation—in which patentees win at trial but not on summary judgment, and in which patentees win each individual issue but lose overall—remain remarkably similar to the patent litigation we studied 20 years ago,” the authors wrote.

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