Patent Appeal Fading?

Lets talk patents today. Of late, I’ve read numerous comments from folks about the perception that patents – or at least, enforcement of patents – is in decline.  Major substantive decisions by the Supreme Court – in Mayo, Alice, Nautilus, and Octane Fitness – have provided new tools for patent challengers to draw upon in infringement suits, and inter partes review has become an almost automatic procedure.   So far, the empirical evidence has supported this perception.  Last month, Dennis wrote about Lex Machina recent report on numbers of new patent case filings, which revealed a substantial drop in patent case filings over the past few months and a 40% decrease in numbers of filings in September 2014 as compared to September 2013.

It seems that case filings tend to be highly stochastic, however, and a case that’s filed one day could be terminated the next or live on for quite a while.  To take another look at the state of patent litigation, I wanted to see whether there are changes in numbers of pending cases.  If cases are terminating faster than new cases are being filed, then the number of pending cases would drop.  On the other hand, if despite the drop in new filings the termination rate is also down, then the number of pending cases would remain stable or even go up.

So this is where this topic goes way over my head…

That said, it’s also possible that companies continue to file patents based on the belief that patent law is like a pendulum and perhaps it will swing back in the other direction.  A third possibility is that the real value of patents lies not in their enforcement value, but in other areas: in signalling, in incentivizing employees, or in defensive publication. Well, not matter how you skin it, the patent business is still a big business. Just not always though the type of business that is best for idea people like you and me.

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