Patent Challenges Surge in May After High Court Ruling

Patent review filings in May surged in the wake of a U.S. Supreme Court ruling that upheld the patent office’s validity review system.

Accused infringers filed 159 petitions challenging the validity of issued patents at the Patent and Trademark Office in May, up from 88 in April, Bloomberg Law data show. The filings represent a 25 percent jump from May 2017.

May filings were the highest since the patent office received 195 petitions in June 2017, when the Supreme Court agreed to hear Oil States Energy Services., LLC v. Greene’s Energy Group, LLC. The case questioned whether the patent office’s review board was improperly wielding authority that belonged to the courts. The Supreme Court ruled April 24 that the board’s review system was constitutional.

The review system is at the center of an ongoing debate on whether challenges to issued patents through a proceeding known as inter partes review are equally fair to patent owners and those sued for infringement.

Administrative challenges are a low-cost alternative to court litigation with less stringent standards than courts. The review system is popular among tech companies, such as Apple Inc., that patent owners often sue for infringement. But some U.S. patent holders, including pharmaceutical companies, argue that administrative challenge procedures make it too easy for alleged infringers to kill patents.

Patent complaint filings in district courts dropped in May, even as patent office review filings rose. Patent infringement lawsuits totaled 269, down 20 percent from April and 23 percent from May 2017.

Delaware Top Patent Venue

The U.S. District Court for the District of Delaware was the busiest venue with 66 complaints, down from 79 in April. The U.S. District Court for the Eastern District of Texas ranked second, with 51 complaints, down from 44 in April.

Patent complaints shed light on the shakeout following the U.S. Supreme Court’s ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC. The May 2017 decision said plaintiffs must file lawsuits where a defendant resides or is incorporated, not just where it makes a sale.

Intellectual property attorneys and academics predicted less activity in courts with patentee-friendly reputations, such as the Eastern District of Texas. They also predicted ballooning dockets in Delaware, where most U.S. companies are incorporated.

Porn Studio Copyright Enforcement Lags

May copyright infringement filings totaled 402, down 35 percent from April but up 29 percent from a year ago. Monthly copyright complaint volumes vary based on sporadic enforcement by movie studios against online piracy of their films.

Strike 3 Holdings LLC and Malibu Media LLC — two porn producers and recurrent filers of film piracy lawsuits — handed in 195 filings and 159 filings, respectively, in April. Their litigation blitz in May, however, slowed to about 90 complaints each.

Trademark complaints totaled 252 in May, up 9 percent from a year ago but relatively unchanged from April 2017. Sream Inc., the U.S. licensee of Roor, a German maker of water pipes for smoking, and lithium battery product company Noco Co., which sells power banks and chargers, were among May’s top trademark suits filers.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bloomberglaw.com

To contact the editor responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com