While the COVID-19 pandemic may have affected many aspects of society, patent litigation has not been negatively impacted. Docket Alarm analytics show that the volume of patent litigation has increased slightly, despite the economic downturn.
Patent litigation has increased dramatically since 2000; while recent years do not match the heights of earlier in the decade, litigation remains much higher than 2005 levels.
Companies designed to make money from patent litigation may be a part of that increase. Patent Assertion Entities (PAEs), according to the Federal Trade Commission (FTC), are “firm[s] that primarily acquire patents and seek to generate revenue by asserting them against accused infringers.” In 2013, the FTC initiated a study on PAEs, which was released in 2016; as a result of the study, the agency recommended patent litigation reforms. The study said PAEs can be divided into two categories: Portfolio PAEs and Litigation PAEs. Portfolio PAEs have vast capital to purchase patents, creating a broad patent license portfolio. Meanwhile, Litigation PAEs are more common and typically rely on revenue sharing agreements to acquire patents and are frequent litigation filers.
Regardless of the reasons for the increase, patent litigation’s dramatic increase in recent years is notable, and large technology companies are sued frequently. The following analysis, powered by Docket Alarm’s Analytics Workbench, will focus on the most active plaintiffs in District Court cases marked with a patent “nature of suit” code since the beginning of 2019. A follow-up article will explore a similar analysis in the Patent Trial and Appeal Board.
From January 1, 2019 to October 31, 2020, among district courts, patent suits were most often filed in the District of Delaware, the Western District of Texas, the Eastern District of Texas, the Northern District of California, and the Central District of California. Both the Eastern and Western Districts of Texas have a reputation for patent litigation. After the Supreme Court unanimously ruled in 2017 that a defendant should only face a patent lawsuit in the state where it is incorporated, the quantity of patent litigation in the District of Delaware, where many U.S. companies are incorporated, became the next logical recipient of suits. Similarly, there was a predictable uptick in the number of lawsuits in California because of the number of tech giants in Silicon Valley. In that Supreme Court case, many technology companies filed amicus briefs, noting that PAEs often pick venues where they are likely to get a favorable judgment and the defendants will often settle to avoid costs and lengthy litigation.
Top Five Patent Plaintiffs
According to Docket Alarm data, beginning in 2019, the most frequent patent plaintiffs are WSOU Investments, Symbology Innovations, Uniloc 2017, Cedar Lane Technologies, and Neodron.
WSOU Investments averages approximately five new case filings per week. In sum, there have been 188 filings over the last 22 months, 73 of which have been in the last three months; most of WSOU Investments’ lawsuits have been filed in the Western District of Texas before Judge Alan Albright. Law Street Media has covered some of this entity’s suits against companies such as Huawei and Microsoft. It appears that WSOU Investments first started filing in March 2020, filing 58 suits in June 2020, followed by zero in the month of July.
The company has been represented by its fair share of law firms: Etheridge Law Group represents WSOU Investments in over 100 lawsuits. Meanwhile, Rabicoff Law, another law firm representing WSOU Investments, has also been covered by Law Street Media.
According to RPX Corp. WSOU Investments was founded in 2017 and obtained approximately 4,000 patents from Nokia and Alcatel-Lucent. Primarily, the patents focus on networking and cloud computing. While related patents are often compiled in the same suit, WSOU Investments will file multiple suits against the same company on the same day, but assert different patents in the different suits. IPWatchdog identified an instance where WSOU voluntarily dismissed their suits before the defendants could file an answer. The company went on to refile the claims, as well as new ones.
The second most prolific patent plaintiff is Symbology Innovations, which has filed 86 suits during the specified time period. Most of these suits were filed in the District of Delaware, although Symbology filed their suits across a larger variety of courts than WSOU Investments. Symbology Innovations’ patents mostly relate to QR code scanning. The company is an affiliate of Leigh M. Rothschild, a patent inventor who frequently files patent infringement suits. According to the histogram, Sand, Sebolt & Wernow drastically increased their representation for this company from 2019 to 2020. Symbology Innovations’ litigation appears to come in bursts of activity, as opposed to a steady filing pattern.
Uniloc 2017 is represented by a variety of firms. As shown in the histogram, Prince Lobel Tye as well as Etheridge Law Group (who also represented WSOU Investments) have increased volume of representation from year to year. However, Feinberg Day Kramer Alberti Lim Tonkovich & Belloli represented Uniloc 2017 in 2019, but not in 2020. However, other firms have stepped in to represent Uniloc 2017, such as Carter Arnett; Hardy Parrish Yang; McKool Smith; and Dunlap Bennett & Ludwig.
Uniloc 2017 has steadily been involved in litigation against Microsoft and Google. According to JD Supra and RPX Corp., Uniloc 2017, an entity asserting mostly cloud computing-related patents, happens to also be one of the many entities associated with Fortress, who was sued by Intel Corporation in 2019 for purported anticompetitive patent litigation. Fortress supposedly uses PAEs to amass its large patent portfolio. Fortress is owned by multinational conglomerate SoftBank Group; SoftBank acquired the IP company in 2017 for $3.3 billion as part of its larger investment portfolio. IPWatchDog suggests a business connection between Uniloc and WSOU Investments, as it appears Uniloc’s co-founder and CEO Craig Etchegoyen also at least partly manages WSOU Investments.
Cedar Lane Technologies
Not to be outdone by its United States peers, Cedar Lane Technologies, a Canadian entity, filed 74 suits, largely represented, like WSOU Investments, by Rabicoff Law, whose representation increased from 2019 to 2020. Additionally, Budo Law also increased its representation from 2019 to 2020. Jacobs & Crumplar as well as Eldreth Law Firm entered the lineup of firms representing Cedar Lane Technologies in 2020. Cedar Lane Technologies often groups its asserted patents in a suit and can file multiple suits at one time against different entities. The patents-in-suit are often media related.
Lastly, Dublin, Ireland-based Neodron filed 37 suits in the relevant time period. Neodron was predominantly represented by Russ August & Kabat. In 2019, it was also represented by Ward, Smith & Hill and in 2020 it was also represented by Capshaw Derieux. Neodron’s patents and its related litigation typically relate to touchscreen technology. Notably, the U.S. International Trade Commission stated in March that it would conduct an investigation for violations of Section 337 of the Tariff Act of 1930 after Neodron filed a suit against various entities. That investigation remains pending.
Overall, despite the COVID-19 pandemic, patent litigation has not appeared to slow down and litigating patents remains brisk business for the plaintiffs. Moreover, patents and other intellectual property have been viewed as “recession proof” assets because these items can be protected even if the economy takes a turn for the worse. This may be part of why there have been 37% more patent-related litigation in the past three months and 431 patent-related district court filings in March 2020 alone, when the COVID-19 pandemic set in. As the pandemic goes on, 2021 could see a further increase.
The analytics in this article are powered by One-Click Analytics from Docket Alarm. To learn more, schedule a demo with the Docket Alarm team.