NPE Litigation in the U.S. Bounces Back

Intellectual Asset Management magazine partnered with Unified Patents to analyze patent litigation data between 2018 and 2020, which showed a significant increase in non-practicing entity (NPE) litigation. According to the data, NPE litigation increased by triple digits in the transportation, financial services, and networking industries, and by double digits in other industries such as Internet of Things (IoT), mobile, and open source. IAM interviewed Finnegan partners Linda Thayer and James Barney for their insights into the trend.

Linda believes that the number of IoT cases being litigated is a result of market and legal changes that are pushing up the number of patent cases overall. Factors such as the Western District of Texas being known for moving cases faster than the Patent Trial and Appeal Board (PTAB) and the PTAB’s Apple v. Fintiv decision have caused patentees to become more confident in prevailing in court. Another factor contributing to the growth is increased availability of litigation funding. Linda said, “Interest rates are at all-time lows, and investors are looking at more creative ways to get a return on investment on their cash piles. Big Tech seems to have been one sector that has weathered the pandemic rather successfully, making them ripe targets.”

The report shows that the transport and automotive industries, in particular, have experienced the lowest numbers of NPEs out of all the industries analyzed for the report. James further suggests that the low number of NPEs in the automotive industry could be due to the patents in the industry being vulnerable to patentability challenges under Alice. He continues to explain that "collective defense organizations such as RPX and Unified Patents" play a large role in minimizing "NPE litigation against automotive companies."

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