Patexia Insight 211: Q2 Patent Litigation Increased by 16%
The landscape of patent litigation has seen significant shifts over the past five years, and the first half of 2024 makes no exception presenting notable trends and developments. In particular, Q2 has marked an increase of 16% in patent litigation compared to the previous quarter. This article provides insights into the trends of patent litigation across various forums, including district courts, PTAB proceedings (Inter Partes Reviews, Post Grant Reviews, Covered Business Method reviews, and Derivations), ITC Section 337 investigations, and ANDA cases. By examining these trends, we aim to facilitate the analysis of the factors driving these changes and their implications for stakeholders in the intellectual property domain.
As illustrated in the above chart, patent litigation in district courts has fluctuated in the past five years between 3,953 and 3,108 cases filed per year, reaching its maximum in 2021 and its minimum in 2023. Filings display an inverted U-shape, increasing from 2019 to 2021 before decreasing until 2023. Meanwhile, for the first half of 2024, compared to the first half of 2023 (1,494 cases), filings are up by 15%. Furthermore, there have been 1,721 filings (796 in Q1 and 925 in Q2), representing a 16% increase quarter-over-quarter. The exact reasons for this rise in patent litigation belong to the realm of speculation and need a thorough analysis of various factors. These include traditional influences such as economic conditions, strategic behaviors of patent owners and entities, shifts in judicial interpretation and enforcement, etc.
In recent years, PTAB filings have shown notable trends that reflect broader patterns in patent litigation. For instance, PTAB proceedings often correlate with the volume and nature of patent litigation cases in district courts. An increase in patent disputes typically leads to more PTAB filings as defendant parties seek to challenge the validity of asserted patents. Patexia’s Litigation Analyzer provides access to a comprehensive database of patent litigation in district court cases as well as PTAB proceedings, among others. Using this database, we have demonstrated that nearly 80% of the IPRs are filed defensively in connection with ongoing patent litigation lawsuits in district courts. This highlights the strategic use of PTAB proceedings to challenge the validity of patents involved in active litigation, underscoring the close relationship between PTAB filings and district court cases.
As seen above, IPRs continue to remain the most common type of proceeding at the PTAB. Interestingly, the trend of PTAB filings closely matches those of district court filings, highlighting the interdependent nature of these two venues in the patent dispute resolution process. The PTAB proceedings have fluctuated from 1,191 to 1,538 filings, reaching a maximum in 2020 and a minimum in 2023. The first half of 2024 saw 658 proceedings filed, which is 1.4% more than the 649 filed in the first half of 2023. It remains to be seen whether patent litigation in district courts will continue to increase and how quickly this will influence PTAB filings. It’s also worth mentioning that the Supreme Court's Amgen decision, which clarifies the written description requirement for patents, will likely increase PTAB proceedings seeking to invalidate patents due to more rigorous standards for patent specificity. As of January 8, 2024, the PTAB has cited Amgen in eight majority opinions.
Over the past decade, ITC investigations under Section 337 have shown fluctuating trends. These investigations, which address unfair practices in import trade, including intellectual property infringement, have generally increased due to heightened enforcement and the growing complexity of global trade. However, despite this upward trend, 2023 saw a significant 35.4% drop in filings, with the number of cases falling from a peak of 79 in 2022 to 50 in 2023. Meanwhile, in the first half of 2024, there were a total of 34 initiated investigations, which is 41.7% more than the 24 initiated in H1 2023. This increase suggests that companies are again turning to the ITC as a strategic venue for resolving intellectual property disputes. An example of this is the Masimo vs. Apple case, where the U.S. International Trade Commission (ITC) conducted a Section 337 investigation and ruled in favor of Masimo, finding that Apple had infringed on certain patents related to pulse oximetry technology, leading to an import ban on specific Apple Watches. The ITC’s ability to issue exclusion orders, and its streamlined processes, make it an attractive forum for seeking swift and effective remedies against unfair importation practices.
Abbreviated New Drug Application (ANDA) cases have become increasingly prominent in the pharmaceutical industry. These cases arise when generic drug manufacturers seek approval from the U.S. Food and Drug Administration (FDA) to market a generic version of a patented drug before the expiration of the original patent. The trends in ANDA litigation reflect the ongoing battle between innovation and accessibility. Due to this unique nature, ANDA litigation follows different patterns compared to patent litigation.
From 2019 to 2021, there is a noticeable decline in the number of ANDA litigation filings, dropping from 318 to 246 cases. The number of cases stabilized in 2022 and 2023, with a slight uptick from 2021's low point. During the first half of 2024, there have been 136 cases initiated, compared to 149 cases in the first half of 2023. This represents an 8.7% decline in the number of cases year-over-year. However, Q1 2024 saw 61 cases, while Q2 2024 saw an increase to 75 cases.
We are currently preparing our ANDA Litigation Intelligence 2024 report. In this report, we analyze trends at both the case and patent level, including filings by jurisdiction, case length analysis, statuses, and conclusions of cases terminated by judgment. Furthermore, we evaluate all stakeholders in litigation, including generic and brand pharmaceutical companies, law firms, and attorneys (both local and lead counsel), evaluating and ranking them based on their activity and performance. This report is available for free to our Concierge members who have an active subscription to the ANDA module. With this subscription, members can also access various exclusive statistics in the company, law firm, and attorney profiles we have built for each stakeholder participating in ANDA litigation.
Stay tuned, as in the coming weeks we will be covering more details from the upcoming ANDA Litigation Intelligence report, as well as the patent and trademark prosecution trends during the first half of 2024!