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Study: Patent Litigation Protects Holders

Patent litigation is picking up. We knew that, of course, but PricewaterhouseCoopers provides the numbers to back it up in its 2008 patent litigation study. (Full report in PDF.) And with that growth in litigation has come a corresponding increase in the tendency of courts to protect patent holders, the study concludes. Among other findings of the study:

  • The annual median damages award since 1995 has remained fairly consistent, when adjusted for inflation.
  • The disparity between jury and bench awards has widened and is likely the contributing factor in the significant increase in use of juries since 1995.
  • Reasonable royalties continue to be the predominant measure of damages awards.
  • Patent holders are successful 37 percent of the time, with a 19 percent win rate in summary judgments and a 57 percent win rate at trial.
  • Alleged infringers increase their trial success rates slightly as plaintiffs, but have not seen the same increased success in summary judgments.
  • While the median time-to-trial has been fairly constant since 1995, significant variations arise by jurisdiction, and patent holder success rates tend to decrease with longer time-to-trial, up to a point.
  • Certain federal district courts (particularly Virginia Eastern, California Central, and Pennsylvania Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards.
  • 32 percent of summary judgments are appealed, with 59 percent modified or reversed; while 43 percent of trial decisions are appealed, with 67 percent modified or reversed.

At his blog I/P Updates, Bill Heinze points to the study and adds several observations of his own. Among them:

  • The number of patent infringement actions filed has a compound average growth rate (CAGR) of 5.8 percent since 1991.
  • The number of patents granted has a compound average growth rate of 3.8 percent since 1991 -- about two-thirds the growth rate of new case filings of patent infringement.
  • The inflation-adjusted median damages award has remained fairly stable over the last 13 years -- at $3.9 million from 1995 to 2000 and $3.8 million from 2001 to 2007.
  • Jury trial success rates have consistently outperformed their bench counterparts for every year since 1995.

What does this mean for businesses and the lawyers who advise them? "Patent litigation appears to continue to be an effective protection and monetization path for patent holders," the report concludes. In other words, hold on to those patents.

Posted by Robert J. Ambrogi on June 2, 2008 at 01:15 PM | Permalink | Comments (0)

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