According to a new analysis of patent litigation data by industry experts, court filings and litigation activity during the COVID-19 pandemic show declining filings and slowing activity. At the same time, new patent cases were actually up slightly between March and May compared to the same period in 2019. Federal district courts have changed their operating procedures in response to COVID-19, using remote communication allowing courts to function with only essential personnel. Measures like these means courts continue to operate, but it is litigants that choose if, when, and where to file patent litigation. To gain a better understanding of how the pandemic has specifically impacted patent litigation filings throughout the U.S., we compared 2019 and 2020 new patent case filings between March 1 and May 1.
Here is a summary of what we found:
- There was a general consolidation of cases, with many districts that experienced a relatively low number of filings during this period in 2019, seeing no such filing during the same period in 2020.
- Districts including the New York Eastern, New Jersey, Pennsylvania Eastern, Colorado, Washington Western, and Illinois Northern saw large declines in new case filings compared to 2019 (consistent with the early and severe impacts of the pandemic in and around these districts.)
- Delaware showed the largest decline in absolute numbers, where new patent case filings fell by 30%.
- Filings in California’s Central and Northern Districts were up substantially, as were filings in Texas Eastern, Northern, Southern and Western Districts.
- In total Texas courts saw 145 more patent cases filed during this period than in 2019, with the largest increase occurring in Texas Western, where 106 more patent cases were filed than during the same period in 2019, a year-over-year increase of 331%. Texas Eastern also saw an increase of 58% (28 cases) over the previous year.
- Overall total patent case filings increased 7% year-over-year for the period studied.
Consolidation of Cases
New patent case filings were consolidated into fewer districts between March and May 2020 compared to the same period the previous year. Twenty districts throughout the country, most with relatively few new cases filed in 2019, saw no new filings during this period in 2020. Of these, significant drops occurred in the Middle District of North Carolina (seven cases in 2019 versus zero in 2020) and California Eastern District (seven in 2019 versus zero in 2020). On the other hand, the Eastern District of North Carolina and the Central and Northern Districts of California saw increases in new patent case filings during this period.
Direct Impacts in Regions Hit Hard by the Pandemic
Several districts in and around metropolitan areas hit hard by the COVID-19 pandemic saw a significant drop in new patent case filings between March and May 2020 compared to the previous year. Delaware, for example, saw 43 fewer new patent cases filed, a decrease of 30% compared to the same time last year. Elsewhere on the East coast, new patent case filings in New Jersey fell 67%, New York Eastern District fell 78% and cases in the District of Massachusetts fell 36%.
Cases filed in Eastern Michigan were down 71% and in the Illinois Northern District (seated in Chicago) the number fell 37%. Further west, new patent case filings fell 74% in Colorado and 87% in Utah. On the West Coast, new case filings were down 73% in the Washington Western District, home to Seattle.
Fewer in Delaware; more in California and Texas
Overall, the year-over-year change in patent filings saw a noticeable drop in Delaware but more filings in California and Texas.
Cases were up substantially in the Texas Eastern and Western Districts. Although the Eastern District has long been a go-to venue for patent owners, the Western District (which convenes in San Antonio) covers over 92,000 square miles, comprising seven divisions encompassing Austin, Del Rio, El Paso, Midland, Pecos, and Waco. Although the district is known to be among the busiest federal courts in the country for criminal felony charges, it has not been associated with significant patent litigation until recently. The Western District saw a significant uptick in patent litigation filings between March 1 and May 1 of 2020 compared to the previous year. Of note were a flurry of patent cases filed by WSOU Investments, LLC (a Los Angeles based group of private investors) against various entities, including Huawei, Microsoft and ZTE. WSOU acquired a portfolio of about 1,600 telecommunications patents from Nokia Corp. in 2018, including technologies developed by telecom equipment maker Alcatel-Lucent, which Nokia acquired in 2017. WSOU is represented in the Western District by Etheridge Law Group, a boutique intellectual property practice headed by James Etheridge.
Indeed, plaintiffs were filing cases in surprising numbers in the first quarter of 2020, prior to the COVID-19 pandemic. As Johnathan Stroud of Unified Patents observed:
Ever since the Supreme Court’s decision in TC Heartland, patent filings have been shifting from the Eastern District of Texas to the now-significantly backlogged District of Delaware, the Northern District of California, and another handful of far-flung districts. But with President Trump’s appointment of patent litigator Alan D. Albright to the bench, and his subsequent working group, publication of aggressive local patent rules, and his urging that parties bring patent cases before him, it now seems the Western District is poised to surpass all others in patent filings.
Filing activity during the COVID-19 pandemic suggests that patent holders continue to see opportunities. While new cases have declined across most federal districts, California and Texas are seeing a surge. Overall, the data point to a patent litigation landscape with continued (if measured) vitality.