Patent-litigation costs nosedive in the US

For a particular type of litigation, costs for cases with more than US$25m at stake dropped 78%

Patent-litigation costs nosedive in the US
The cost of patent litigation in the US has dropped precipitously over the last two years, a report from Bloomberg Law said.

The American Intellectual Property Law Association’s (AIPLA) “2017 Report of the Economic Survey,” a copy of which was obtained by the publication, shows that the median overall cost of a patent infringement case involving risk of US$1m to $10m has dropped to US$1.7m in 2017, a 47% decline from 2015. The cost for a case with less than US$1m at stake fell 27% over the last two years to US$800,000 in 2017.

For a particular type of case, those that are brought to court under the Hatch-Watchman Act that concerns generic drug market approval, the median cost for a case with more than US$25m at stake nosedived 78% from 2015 to $1.8m in 2017. For a case under this law with less than US$10m at risk, the cost dropped 74% to US$706,000.

For defence against non-practicing entities, or holding companies that don’t make products or offer a service but hold intellectual property, cases that involve more than US$25m in risk declined 45% from 2015 to US$3.3m in 2017. Cost of cases under this category with less than US$25m in risk decreased 39% to US$2m.

Several factors have brought about the downtrend, Bloomberg said. A lawyer the publication talked to said that more and more litigants are challenging patents at the US Patent and Trademark Office using the body’s Patent Trial and Appeal Board (PTAB), which was created by the America Invents Act of 2011.

In addition to being able to go through “inter partes reviews” (IPR) at the PTAB, more patent holders are also increasingly using “motions to dismiss under Section 101 of the Patent Act,” which are known as “Alice motions” after the US Supreme Court’s Alice Corp. v. CLS Bank Int’l ruling in 2014.

The cost to file IPRs increased, however, from 2015 to 2017. The median cost rose 25% to US100,000. Nonetheless, the median cost of a PTAB hearing declined 9% to US$250,000 during the period.

Companies are now also increasingly controlling costs, another lawyer said. He added that there has been an increase in cases where at least one party is under an alternative fee arrangement.


Related stories:
Law firm bosses are in their most optimistic mood in years
Texas firm jets its way to Silicon Valley success

Free newsletter

Subscribe to our FREE newsletter service and we’ll keep you up-to-date with the latest breaking news, cutting edge opinion, and expert analysis affecting both your business and the industry as whole.

Please enter your email address below and click on Sign Up for daily newsletters from Australasian Lawyer.

Recent articles & video

Allens assists on $1.4bn capital raising applying ASX temporary class waiver

Hall & Wilcox plays major role in assets acquisition by fintech investor

CEO and managing partner parts ways with DWF

Authenticity and trustworthiness are critical to professional success, says G+T partner

Global healthcare company receives $1.2bn equity boost with HSF’s help

US bar comments on nationwide protests after George Floyd death

Most Read Articles

Lander & Rogers beefs up technology and digital practice with new partner

Baker McKenzie’s IPTech team gets an upgrade with new partner

Authenticity and trustworthiness are critical to professional success, says G+T partner

Gadens helps e-sports guru get in the game on $4.2m sale