PwC 2017 Patent Litigation Study Is Now Out

Every year around this time I look forward to reading PricewaterhouseCoopers' annual study of U.S. patent litigation.   The firm's 2017 Patent Litigation Study:  Change on the Horizon? is now out and available here.  The study's methodology, including its adjustment of median damages to 2016 dollars, is set out at p.29.  Here are some highlights: 

1.  Patent infringement litigation declined to 5,100 filings in 2016, 9% fewer than in 2015 (p.4).  (I'd note that Lex Machina's 2016 Patent Litigation Year in Review, for which if you're interested you should contact Lex Machina, reports 4,537 filings in 2016, down 15% from 2016.  I'm guessing the difference may be due at least in part to different cutoff dates.  Lex Machina reports filings through December 31, 2016, while PwC uses a September year-end (see p.4).  More generally, I'd recommend that interested readers get a copy of the Lex Machina report for purposes of comparison; see also my paper with John Golden, which at pp. 14-15 and accompanying endnotes discusses some of the differences between the two firms' analyses and methodologies relating to damages, for previous years.)

2.  Notwithstanding a record damages award of $2.5 billion in Idenix v. Gilead (noted previously here), median damages declined from $10.2 million in 2015 to $6.1 million in 2016 (p.5).  Between 1997 and 2016, however, median damages have "ranged from $2.0 million to $17.0 million, with an overall median award of $5.8 million over the last 20 years" (p.9).  "Excluding damages awarded before trial (i.e., summary judgment and default judgment), the overall median award over the last 20 years jumps to $8.0 million" (id.).  Jury awards outpace bench awards $9.5 million to $0.6 million from 2012-16, a factor of about 15 (p.10).  For the years 2007-16, reasonable royalties account for 61% of the awards to practicing entities, lost profits 21%, and mixed awards make up 19% (p.11).  

3.  Excluding ANDA-related cases, 80% of U.S. patent trials are now conducted before juries (p.6). 

4.   Patent owners' overall success rates from 1997-2016 stand at 36% for practicing entities and 25% for NPEs.  Among cases that go to trial, however, success rates are 77% and 70%, respectively.  Overall, success rates at trial before juries are 74%, before judges 52% (pp. 14-15).  Though NPEs are less likely to win overall, for those that do win the median damages awards from 2012-16 were $15.7 million, compared to $4.1 for practicing entities (p.16).  From 1997-2016, median damages awards for university or other nonprofit NPEs were $16.3 million, for "company" NPEs $13.0 million, and for individual inventors $6.7 million.  Success rates for universities and nonprofit NPEs were also the highest (52%), followed by 28% for company NPEs and 18% for individuals (pp. 16-17).    

5.   Median time to trial has crept up to about 2.5 years, with stays pending PTAB proceedings probably responsible for some of the delay (p.7).

6.  The study also presents data on the distribution of cases, damages awards, and success rates by industry (pp. 18-20), and ranks district courts according to a number of metrics at pp.22-24.  The report concludes with a section on appeals, reporting that 75% of decisions are appealed and over half of all appeals result in a reversal at least in part (pp. 25-27).