The number of new patent infringement lawsuits in the U.S. has risen more than 10 percent to 6,092 last year despite a 2011 law specifically aimed at reducing patent litigation, according to a new Lex Machina report. In 2013, Apple and Amazon.com were the most frequent targets of U.S. patent-infringement lawsuits in an increasingly complex legal climate that Congress and the Supreme Court are being asked to control.
Last year, the number of actions increased 12.4 per cent from 2012 despite the America Invents Act (AIA), which was the most significant overhaul of the patent system in decades. Companies including Google, the fourth-most sued, are pushing lawmakers to make changes they say would discourage patent owners who rely on the cost of litigation to extract quick settlements from companies.
“The patent litigation environment continues to be active and at times unpredictable,” Owen Byrd, general counsel for Lex Machina, told Bloomberg Businessweek. “There is still growth in patent litigation and clearly a measurable percentage of that growth comes from” so-called patent monetization entities.”
"If the AIA's intention was to make the patent litigation system predictable and less expensive, it hasn't met those goals yet," said Owen Byrd, lawyer for Lex Machina.
Apple was sued 59 times, Amazon, 50 and AT&T, 45. Courts in eastern Texas and Wilmington, Delaware, were the busiest. The most litigious U.S. patent owner is based in Luxembourg and owns patents related to vehicle tracking and notification systems.
The increase in litigation is partly because of 2011 changes in how lawsuits were filed. Before, a patent owner could file a single suit against dozens of companies; now all defendants must be related in some way. Court rulings over the past eight years that have limited damages made it more difficult to block products, and eased rules to invalidate patents also may be a factor, according to Jason Cassady of Caldwell Cassady & Curry in Dallas.
“License negotiations are more likely to lead to lawsuits from both “the shakedown entities and the legitimate patent holders. People do not voluntarily take licenses anymore,” Cassady said. “They’re much less likely given the silver bullets involved in litigation and the patent office these days.”
In a filing with the Supreme Court, Apple said that for every case that reaches court, it gets dozens of letters demanding royalties. The number of demand letters being sent out by patent owners is unknown, with a White House report last year estimating that over 100,000 companies were threatened in 2012. Congress is considering proposals that would require patent owners to make clear who really controls the patent, put on hold lawsuits against the users of technology in favor of suits involving the manufacturers, and mandate that the loser in a patent case pay the winner’s legal fees except in limited circumstances.
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