By Donald Zuhn
Last Monday, PricewaterhouseCoopers announced the release of its 2007 Patent and Trademark Damages Study. According to the study, while the number of patent infringement actions increased every year between 1991 and 2004, the number of filed patent cases dropped in 2005 - constituting the first decline in sixteen years. In particular, patent actions dropped more than 11% from 3,075 in 2004 to 2,720 in 2005. Among the factors responsible for the decrease in patent cases, the study lists alternate dispute resolutions, recent Supreme Court rulings, the increased cost of litigation, and reduced damage awards.
The study also found that:
• Since 1995, plaintiffs have posted an overall win rate of only 34%.
• Between 1995 and 2005, the most favorable district for plaintiffs has been the Western District of Wisconsin, where plaintiffs enjoy an overall win rate of 63% and a win rate of 91% after summary judgment. Other plaintiff-friendly districts include the Eastern District of Texas, the Eastern District of Virginia, the Central District of California, and the District of Delaware.
• Between 1995 and 2005, the least favorable district for plaintiffs has been the Eastern District of Michigan, where plaintiffs can expect to win a mere 12% of all cases and only 33% of cases that make it past summary judgment. Other plaintiff-unfriendly districts include the District of Kansas, the Southern District of Florida, the Southern District of New York, and the U.S. Court of Federal Claims.
• Over this time period, plaintiffs have been awarded damages in 35% of all cases filed and in 61% of all cases that are not decided at the summary judgment stage.
• The average damages award dropped from $31 million in 2004 to $5 million in 2005.
• More patent cases are being brought before juries, which tend to award higher damages. In particular, juries decided 19% of damage awards in patent cases in the 1980's, 38% in the 1990's, and 53% between 2000 and 2005. In addition, the median jury award between 2000 and 2005 ($8 million) was more than five times higher than the median award in bench trials ($1.6 million).
• Filed patent cases have been climbing at a higher rate than patent grants over the past fifteen years.
• The downward trend in patent cases may be transitory, particularly in view of the Supreme Court's decision in Medimmune v. Genentech.
According to PricewaterhouseCoopers, the 2007 study was prepared by analyzing the results of 2,193 U.S. Federal District Court cases - including 1,367 patent cases, 797 trademark cases, and 29 cases having both patent and trademark issues - and 350 Federal Circuit cases - including 273 patent cases, 70 trademark cases, and 7 cases having both patent and trademark issues.
The 2006 Patent and Trademark Damages Study can be obtained at no charge here.
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