NEW YORK, Feb. 26, 2007 (PRIME NEWSWIRE) -- Intellectual property enforcement actions protect patent, trademark, copyright, and trade secrets and continue to be a key area of litigation. However, the number of patent infringement actions has declined, according to the 2007 Patent and Trademark Damages Study released today by PricewaterhouseCoopers LLP. While filed patent cases increased more rapidly than growth in patent grants during the past 15 years, filed patent cases have been declining in the past two years, the study finds.
Reduced filings of business method patent actions, alternate dispute resolutions, recent Supreme Court rulings, the increased cost of litigation, and reduced damage awards have all conspired to reduce new patent cases in U.S. Federal District Courts. The number of patent infringement cases filed increased every year from 1,171 in 1991 to 3,075 in 2004. In 2005, the number of filed patent cases fell to 2,720, the first decline in 16 years. During the same period, trademark case filing increased 65 percent, from 2,220 in 1991 to 3,668 in 2005.
"As long as companies face fierce global competition in the United States, changing business environments, and a desire to be first to market with new products or processes, litigation to establish or preserve a market position and serve as a barrier to entry will continue to be a critical corporate strategy," says Aron Levko, partner and Intellectual Property Practice Leader at PricewaterhouseCoopers.
The study reveals there is a growing disparity between jury and bench trials in awarding damages, and in the win rate of plaintiffs among the various jurisdictions in the U.S. federal courts system. "The measurement of damages is also undergoing fundamental change. The right choice of key case elements - forum, venue and damages issues - has never been more important to achieving success in IP litigation," adds Levko.
Issues raised by the study include:
-- Juries award larger damages in patent cases
- A steady shift from bench trials to juries in patent
cases has taken place since the 1980s, fueled by
juries' tendency to award higher damages than judges.
Since 2000, juries have decided 53 percent of patent
damage awards.
-- Overall, plaintiffs win about 35 percent of the time
- This win rate increases to 61 percent after motions for
summary judgment have been considered and the case
continues.
-- Interest awards pegged to T-Bill rates are increasingly the norm
- Treasury bill rates have surpassed the prime rate as
the most common benchmark for prejudgment interest
because judges and juries consider them to be a more
widely accepted risk-free rate.
-- Damages awarded in patent cases are leveling off
- During the period 2000 - 2006 the number of awards in
patent cases increased 59 percent compared to the
1990s. However, there has been a leveling of median
award amounts in the past few years and a sharp
reduction in the average award amount in the past year.
-- Different venues affect plaintiffs' win rates
- The Western District of Wisconsin has been the most
favorably disposed to plaintiffs, with a win rate of 63
percent overall and 91 percent after summary judgment.
The district with the lowest win rate for plaintiffs is
the Eastern District of Michigan, with a plaintiff win
rate of 12 percent overall and 33 percent after summary
judgment.
-- Reasonable royalties overtake lost profits as a measure of
damages
- Since 2000, reasonable royalties have overtaken lost
profits as the most frequent basis of damage awards in
patent cases (65 and 32 percent respectively).
"IP remains an important corporate asset, increasing in value when companies make use of the invention or mark," comments Levko. "Accordingly, IP enforcement actions containing damages analysis will continue to be a focal point in maintaining the integrity of this value."
This study focused on damage decisions in U.S. Federal District Courts, including summary judgments in declaratory actions and motions to dismiss, as well as associated decisions by the Court of Appeals for the Federal Circuit (CAFC).
The study included 2,193 unique U.S. Federal District Court cases (among them 1,367 patent cases, 797 trademark cases, and 29 cases that included both patent and trademark issues) and 350 unique CAFC cases (including 273 patent cases, 70 trademark cases, and 7 cases that included both patent and trademark issues).
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