Patent Litigation Dynamics: Key Value Drivers And Efficiency Implications

The system for litigating patents has long been recognized as having significant positive and negative effects on innovative activity in the United States. Consequently, understanding patent litigation dynamics is of paramount importance. We study how infringement awards and other case outcomes affect patent litigation, and we mine a comprehensive dataset we have assembled comprising over 1,300 final patent decisions in U.S. district courts between 1995 and 2008. Our previous work determined that patent infringement awards are highly predictable based on intrinsic features of the cases, litigants and patents at issue. Presently, we expand on that work with two parallel paths of inquiry. First, we dive deeper into our awards data to examine the specific drivers of award value, and we contrast our findings with conventional notions of “valuable patents.” Second, we examine the cases in which damages were not awarded, whether due to findings of non-infringement, invalidity, unenforceability or otherwise, and investigate patent litigation efficiency and expense across the system as a whole. This latter work is particularly timely in light of the skyrocketing costs of patent litigation and calls for systematic changes to improve efficiency.