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Patent infringement lawsuits and damage awards continued to decline last year after dropping in 2005, according to a new PricewaterhouseCoopers LLP study. Data collected through the first half of 2006 points to a continuation of the 2005 decline in patent lawsuit filings. For the first time in 16 years, the number of filed patent cases fell to 2,720 in 2005 from 3,075 in 2004. “The indication in 2006 is that it continues,” said Aron Levko, partner and Intellectual Property Practice Leader at the New York-based PricewaterhouseCoopers. A decrease in business-method patent filings, which are typically for computerized data processing, and an uptick in alternative dispute resolution for patent cases, have affected filings, Levko said. Patent damages from cases remain below the median peak of $7.4 million 2001 and 2002. The number slid to $3.5 million in 2003 and $2.8 million in 2004 before climbing back to $6 million in 2005. For the first half of 2006, the median damage award was $1.5 million, Levko said. The study, which examines all district and appeals court cases where PricewaterhouseCoopers had complete information about parties and damages, also concluded that plaintiffs win about 35% of their cases, juries award higher damages than judges and that win rates vary widely in different courts.

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