Patent Litigation in the United States, 1980 to 2020

“The precipitous decline in patent cases commenced beginning in 2016 is likely due to a capitulation by many patent owners who finally started to come to terms with the fact that many legacy patents were simply not going to survive the Federal Circuit’s restrictive interpretation of the Alice/Mayo framework.”

Is patent litigation out of control? Has patent litigation ever been out of control? The answers to these questions largely depend upon your point of view, and as with most complex topics, the truth is nuanced. What is not nuanced are the numbers reported in the annual reports from the Administrative Office of the United States Courts, which shows that the number of patent cases that reach trial are extremely few. In fact, the number of cases that make it to the final pre-trial conference represents a small subset of the number of cases that are filed.

I initially started this research in 1997, while working on my Master’s thesis, which dealt with patent litigation and the use of alternative dispute resolution.

The real growth in patent litigation over the last 40 years has taken place before trial. Between 1980 and 2020, the number of patent cases reaching trial ranged between a low of 63 (in the COVID-19 affect FY 2020) but was otherwise at a low o 64 (in FY 2019) and a high of 164 (in FY 2016). All are a remarkably low number of cases that proceed to trial given the number of patent lawsuits commenced. For example, 6,497 patent cases were commenced in 2013, some 5,686 patent cases were commenced in 2014 and some 5,564 patent cases were commenced in 2015. So, just like all other areas of litigation, very few cases proceed to trial. See Figure 1 (below).

Indeed, if you focus on the period prior to enactment of the America Invents Act in 2011, which occurred just two weeks before the end of FY 2011, the number of trials remained remarkably constant, averaging 100.03 trials per year for the previous three decades. In FY 2012, the number of trials spiked to 139, spiked again to 164 in FY 2016 and stayed high at 151 in FY 2017, before dropping to 99 in FY 2018, to 64 in FY 2019, and 63 in FY 2020.

Figure 2 (above), which relates to the number of patent cases terminated, shows a visually compelling surge in the number of patent cases terminated beginning in 2011 and remaining above the trend line through 2018. Two major events seem likely to account for this surge, which peaked in 2014. The Supreme Court’s decision in Alice Corp. v. CLS Bank, 134 S.Ct. 2347 (2014) was delivered in June 2014. This was the fourth in a series of patent eligibility decisions by the High Court that all retreated from the expansive view of patentability previously announced by the Court in Diamond v. Diehr, 450 U.S. 175 (1981) and Diamond v. Chakrabarty, 447 U.S. 303 (1980). As a result of the culmination of the patentability cases from 2010 to 2014, motions to dismiss became commonplace in patent litigation where software patents, medical diagnostics or DNA were the subject matter.