Patent Lawsuits Drop But Tech Firms Still Top Target

Technology companies like Google Inc. and Apple Inc. remain the biggest targets of patent lawsuits even as the overall litigation totals dropped last year, according to a study released by Unified Patents.

The number of patent lawsuits filed fell 17 percent, to 5,002 from 6,030. Of those, 63 percent involved hardware, software and networking companies, according to Unified Patents, a group of technology companies that pool resources to fend off patent claims.

In the high-tech sector, 83 percent of lawsuits were filed by companies that depend on licensing patents for most of their revenue. That compares with 18 percent of suits in the healthcare field and 27 percent of cases in other industries.

“Almost all of them are companies whose business model is to do patent licensing” or assert patent rights in court, said Shawn Ambwani, chief operating officer of Los Gatos, California- based Unified Patents.

The number of lawsuits has become a focal point as Congress considers legislation creating new rules for patent litigation only four years after passing the most sweeping overhaul of the U.S. patent system in five decades.

Proponents like Google and Cisco Systems Inc. point to the high number of suits to back their argument in favor of rules to halt what they consider abusive litigation practices, such as one to make the losers in suits pay the winner’s legal fees.

Qualcomm, GE

Companies like Qualcomm Inc., which gets much of its profit from licensing patents for mobile-phone chips, and a group of large companies that include General Electric Co., warn that legislation may do more harm than good. The changes passed in 2011 need time to take effect before anything else is done, they say.

While technology companies dominated the litigation, health-related lawsuits — including ones over drugs, medical devices and health-care services — accounted for 16 percent of lawsuits and tended to involve large companies on both sides, according to the study.

The remaining 21 percent of suits covered everything else – – items like consumer products, energy equipment and fitness devices. They typically involved operating companies and small- or medium-sized businesses.

It’s difficult to compare recent year figures with those before the 2011 law. Patent owners had been able to sue a number of companies in one case; and after the law changed they had to file separate suits, so the number of individual lawsuits jumped. Lawsuits also tend to increase in time with an increase in the number of patents that are issued.

Fourth-quarter suits were almost the same as in the third quarter, indicating there may be some stabilization, Ambwani said.

By Susan Decker | January 13, 2015

 

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