Patent Trolls Accounted For Two-Thirds Of Infringement Cases In 2013

Last year also saw a record number of patents granted.

The number of patent case filings and grants reached a record high in 2013, with patent trolls accounting for two-thirds of patent infringement cases, a drastic leap from 28% in 2009.

In 2013, the U.S. Patent and Trademark Office granted 300,000 patents, a 7% growth from the year prior, according to a report PricewaterhouseCoopers released Thursday. Last year, patent holders also filed 6,500 litigation cases, a 25% rise from 2012.

The average damages awarded to nonpracticing entities (aka patent trolls) tripled that of practicing entities over the last four years. When the case went to jury, the median award was 37.5 times higher than the median payment issued between 2010 and 2013.

Both patent trolls and practicing entities won two-thirds of cases when they went to trial, but overall success is much lower: 25% for nonpracticing entities and 35% for practicing entities. Of the 71% of district patent decisions that are appealed to the federal circuit, 24% of cases were affirmed and 11% were reversed, vacated, or returned to a lower court for consideration.

Consumer products, biotechnology/pharma, and industrial/construction were the industries that filed the most number of patent cases. However, telecommunications and biotechnology/pharma received the largest median payouts at $22.3 million and $19.8 million, respectively.

Following President Obama's directive to reform the patent system, the U.S. Patent and Trademark Office is establishing a new appeals process and regional offices, including one in Silicon Valley, as part of its outreach efforts. "It's Washington coming to the innovation community," deputy director Michelle K. Lee told Fast Company. There are already offices in Detroit and Dallas, and temporary ones set up in Menlo Park, California, and Dallas.

The patent office is also undertaking a number of IT projects, including one to build a online portal so people from the community can contribute their expertise to help train its 8,000 examiners.

All these efforts, Lee hopes, will result in better patents being written and granted—and ultimately fewer instances of patent trolling. "The better application you file, the better quality patent we issue," she said. "It's a winning situation all around—for the community, the Patent and Trademark Office, innovation, innovators."

[Image: Flickr user Phillip Wong]

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