Surprises Found in Data on IP Suits

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It's not true that patent infringement suits are going through the roof -- filings have held steady for eight years -- but there are a whole lot more defendants out there looking for lawyers.

While many IP litigators have been busier in the past few years, the actual number of infringement suits has hovered between 2,300 and 2,800 a year. But in 2007, the number of defendants named in these cases jumped from around 6,000 in 2006 to 9,000 (see PDF chart; registration required).

That's just one of the facts revealed by Stanford Law School's Intellectual Property Litigation Clearinghouse, a searchable online database unveiled Monday evening that tracks all patent cases since 2000. Offering hard statistics on trends, from how many suits have been filed to how plaintiffs fare in front of a particular judge, the clearinghouse is being greeted enthusiastically by lawyers.

"The tools that are being created here will make research and strategy much more efficient," said Daniel Cooperman, general counsel at Apple Inc., who attended the launch at Stanford. "And therefore resolutions will be more efficient."

Mark Lemley, an IP law professor at Stanford who spearheaded the project, said that the database revealed some surprising trends.

For instance, in spite of all the whining by big tech companies besieged by infringement suits about how unfair the patent litigation system is, defendants actually win more in the courtroom than plaintiffs, 57 percent to 43 percent.

"It's clear that if you're willing to take the case to judgment, you've got a decent shot at avoiding liability," Lemley said. "What's probably concealed in the data is how many people are paying to get rid of threats."

The rise in the number of defendants is because of the proliferation of nonpracticing entities that often sue multiple defendants or whole industries, said Yar Chaikovsky, an IP litigator with Sonnenschein Nath & Rosenthal.

"There's been a shift in the type of cases that we're working on, and because of that there may be a perception that we're handling more cases," Chaikovsky said.

This year, the number of defendants has been a little more on pace with previous years, although the numbers don't reflect the full year. Lemley speculated that plaintiffs were trying to sue as much as they could in 2007 for fear that the congressional rumblings on patent reform would become reality.

One of the biggest things on patent lawyers' minds is venue. Plaintiffs rush to file suits in plaintiff-friendly places like the Eastern District of Texas, while defense lawyers rush to file declaratory relief actions in places like the Northern District of California.

In 2007, the most patent cases were indeed filed in the Eastern District of Texas with more than one a day filed there for a total of 369. Runner-up was the Central District of California with 324, while the Northern District had 144.

The database shows that the Eastern District of Texas is very plaintiff-friendly. More surprisingly, it also shows that plaintiffs have edged out defendants over the past three years in jury verdicts in the Northern District of California, which is often thought to be defense-friendly. Another little-known fact: The Eastern District of Texas turns out not to be the easiest place to bring an infringement suit to trial. A higher percentage of cases make it that far in Delaware.

"One of the surprises that we found was the District of Delaware, which is very unlikely to grant for summary judgment," Lemley said. "The assumption was that you'll file in the Eastern District of Texas because you'll get to trial, but your odds of getting trial are much greater if you file in Delaware."

The clearinghouse has already spawned a number of research projects, including one on the most talked-about subjects in patent litigation: nonpracticing entities, derogatorily called "patent trolls," whose main business is suing for patent infringement.

Lemley and Nathan Myhrvold, founder of giant patent-holding company Intellectual Ventures, are working on a project using the database that will classify exactly who is filing all the patent infringement lawsuits, Lemley said. He also said the database may provide clarity for those looking at issues of patent reform.

The IP clearinghouse isn't just devoted to 23,000 patent suits. Copyright, trademark and trade secret cases have also been entered, bringing the total number of cases to around 78,000, although those aren't as ready for statistical analysis yet.

While Lemley spearheaded the project, the clearinghouse's executive director is Joshua Walker, an IP lawyer who has long been building legal data collections. The project is also sponsored by companies on either side of the debate over patent reform from Cisco Systems Inc., which supports limiting patent-holders' rights, to Qualcomm Inc., which takes the opposite position.

Charlene Morrow, the head of patent litigation at Fenwick & West, one of the sponsors of the project, said her firm will be using the database.

"Before, we could pull that data together, but our clients probably wouldn't want to pay for it," she said.