Correlation isn’t causation, but . . .

Lex Machina has provided us with a suggestive bit of data regarding the impact of recent changes to the patent law: September patent infringement case filings dropped 40% from 2013

Is the change due to the Supreme Court’s decision to (arguably) undermine software patents in Alice? Maybe. Did the decrease in filings happen because owners of ‘weak’ patents fear having to pay the other side’s attorneys’ fees in the wake of the Supreme Court’s Octane Fitness fee-shifting decision? Could be. Maybe the assorted post-issuance procedures created by the America Invents Act has contributed to the decrease? Possible. A few weeks ago, Vox spotted a trend against software patent validity in US courts, which may (or may not) have something to do with the decline in new suits. As usual, PatentlyO has a good rundown of some of the changes possibly driving the decrease. 

We all know that correlation should not be confused with causation, but if the decrease holds—and only time will tell whether this is a blip or a trend—there are plenty of changes to the US patent system that correlate rather nicely with the drop. Untangling causation among all of the candidates, even if possible, will require more data. Certainly, ‘a little bit of all of all them’ may be the most likely explanation of any sustained decrease in patent infringement suits.

Assuming the drop in patent litigation volume holds, and further assuming we can credit it to some variety of patent reform, whether legislative or judicial, whether the change is a ‘good thing’ may depend upon the nature of the cases still being filed and any individual commentator’s point of view. Wise commentators will likely withhold judgment until we have both a larger amount of data and more details about the suits being filed. Nevertheless, the drop is large enough to catch the eye of any interested observer. This is a (possible) trend worth watching.

Fewer Infringement Suits in 2014?

Simply counting the number of patent infringement lawsuits filed may not tell the whole story of the US patent system, but a sudden and sharp drop in the number of new case filings is still news. Lex Machina notes that the number of new infringement suits filed in January, 2014, was the lowest monthly total since 2011.

There are plenty of caveats that should go with this bit of news, of course, and one month does not make a trend. Even if the January numbers do represent a downward trend in patent infringement suit filings, the totals may still be above (or below) the theoretical optimal amount of patent litigation for our economy. Lex Machina’s numbers do cast at least some doubt on the notion that patent infringement lawsuits are increasing in number, however.

One month of data probably will not change anyone’s mind, at least not anyone with strong Bayesian priors. Nevertheless, anyone who actually knows that they have strong Bayesian priors should welcome another data point.

Trolls. And fights about trolls. And fights about what a troll is. And fights about when a troll is.

Not too long ago, a trio of academics devoted time and energy to evaluate patent infringement complaints from the past few years. Christopher Cotropia, Jay Kesan, and David Schwartz classified the types of entity bringing the suit, and then (huzzah!) made their data public. They published a paper that - among other things - concluded that the recent uptick in the number of patent infringement lawsuits filed by so call “patent trolls” was largely a result of legal changes made by the America Invents Act, because the total number of defendants sued by “patent trolls” had not experienced the same explosive growth. Essentially, they concluded that the legal requirement of filing separate suits for each defendant had made the much discussed “troll problem” look worse than it was.

Now, James Bessen has written a guest post at PatentlyO taking exception with Cotropia, Kesan, and Schwartz. Bessen took even more exception to a paywalled article entitled “Facts Show Patent Trolls Not Behind Rise in Suits” by former Director of the United States Patent and Trademark Office David Kappos, but that is a much longer discussion. Essentially, Bessen concludes that “trolls” constitute a large and growing problem for American companies and the American economy. Bessen’s arguments are well worth a read, and that this argument is occurring with numbers and data and actual statistical analysis at least gives all of us interested an opportunity to evaluate the arguments and the evidence supporting the arguments. 

While a blog at a patent prosecution boutique is not likely to resolve the dispute, the at least two sides of this vigorous debate seem to be talking by one another on a pair of points: what and when. Precisely what a “patent troll” is and when “troll” patents were asserted and obtained are two key differences that fuel this (and many other) fights over what patent law reform is needed, or even whether patent law reform is needed at all.

First, what is a “patent troll?” Almost everyone involved in patent law agrees that a “patent troll” is something bad - the term “troll” is not a term of endearment. Still, what is a “troll,” and what makes “trolls” bad? Most of the commentators have acknowledged degrees of “trollness” by classifying different types of entities that may or may not be a “troll.” For example, Cotropia, Kesan, and Schwartz divided potential “trolls” - patent infringement plaintiffs who are not practicing the claimed invention themselves - into eight different but not entirely distinct categories, from universities to independent inventors to companies that tried but failed to commercialize an invention to companies that simply buy up patents to assert. Some observers might feel that universities and independent inventors are not actually “trolls” at all, while other observers might also absolve companies that tried but failed to commercialize an invention from the “troll” title; others, however, might consider all patent assertions by plaintiffs not commercializing the claimed invention to be “trolls.” Some observers might even consider some patent plaintiffs asserting patents that they are commercializing to be “trolls” if the patent infringement claims seem ill-founded. Certainly, “trollness" is in the eye of the beholder, but finding some consensus as to which types of entities are a problem is a larger prerequisite to solving the perceived problem than tagging those entities with a catchy name.

Second, the dispute between Bessen and Cotropia, Kesan, and Schwartz reveals the importance of when a patent lawsuit was filed. I would also add that when the asserted patents were issued and the patent applications filed matters greatly to any consideration of possible “patent trolls” and how to fight them. The substantive law governing patents has changed rapidly in the United States. An infringement lawsuit filed in 2009 differs from an infringement lawsuit filed in 2014 due to changes in joinder requirements, as noted above. Beyond joinder rules, however, a patent issued in 2002 from an application filed in 1997 under the prior Patent Act differs from from a patent issued in 2014 from a patent filed on March 16, 2013 under the America Invents Act. The glacial pace of the patent system - measured in decades of rights from the filing date of the patent application - makes evaluating the impact of changes to the law difficult due to the copious amount of patents issued under the prior law. We should not wait twenty years or more for all of the pre-AIA patents to expire before making further changes to patent law, but we should realize that we are seeing almost none of the major impacts of the most recent legislative reforms in the courts yet. 

Unanimity will likely never be achieved in the patent world, but hopefully we can at least be clear about what we are debating. Increased clarity about what types of entities are a problem in the patent system and which rules applied when problem patents were obtained can help us fix the problems that actually exist, and may even help avoid creating new problems.