NPE Activity on the Rise as Economy Slumps

A post earlier this year (“The Effect of an Economic Downturn on NPE Litigation” 1/27/09) cited historical data to suggest that NPE patent litigation increases in a deteriorating economic environment. Based on NPE activity through the first half of 2009, it appears that history is indeed repeating itself.

According to Patent Freedom statistics, in 2008 there were 2,806 patent cases in the United States.  Of these, 359 – or 12.8% – were NPE-driven suits.  Looking at PACER and Lexis/Nexis data through June 30 of this year, we see that while overall patent litigation activity has actually slowed, the incidence of NPE cases is higher.  There were only 1,318 patent cases at the halfway point of 2009, but of these 224 were NPE cases (a 25% increase in activity).  Fully 17% of the US patent cases filed in the first six months this year were NPE-driven.

With general economic recovery still a work in progress and world markets remaining largely soft and unstable, this data suggests that NPE activity will continue to rise at an above-average rate through at least the end of 2009 and into early 2010.