Patent Litigation Trends in the Three Months after T.C. Heartland

Patent Litigation Trends in the Three Months after T.C. Heartland

By | 2017-10-18T22:08:02+00:00 October 18th, 2017|Legal Trends|

This blog post focuses specifically on patent litigation trends; for a broader discussion of other litigation trends in Q3, see our update here.

On May 22, 2017, the Supreme Court issued its opinion in T.C. Heartland, holding unanimously that, under 28 U.S.C. § 1400(b) (the statute governing venue in patent suits), a domestic corporation “resides” only in its state of incorporation.

Since that landmark decision, patent case filings trends have responded dramatically:  the number of cases filed in the Eastern District of Texas has significantly declined and been overtaken by the number of cases filed in the District of Delaware.

Fig. 1:  Top districts by patent cases filed 2014-2017 Q3

Looking at a window of 90 days on either side of the T.C. Heartland, the change is stark.  Before T.C. Heartland more than twice as many cases were filed in E.D. Tex. as D. Del.; but afterwards, it’s less than half.  The number of cases filed outside of the top two districts is very similar.  

Fig. 2:  Cases filed 90 days before and after T.C. Heartland

Viewing the filing numbers on a week-by-week basis shows that the trend towards Delaware is not the result of a single period of intense filing but instead has been relatively consistent ever since the decision.

 

Fig. 3:  Top districts by patent cases filed 2016-2017 Q3, by week

Since the decision, the grant rate of transfer motions by the Eastern District of Texas has increased.

Fig. 4: Motions to transfer decided 90 days before and after TC Heartland, E.D. Tex. vs. National

Three of the recent trends (the decrease in E.D. Tex., the increase in D. Del. and the decline in the number of cases filed between Q2 and Q3 2017) have been driven primarily by High-Volume Plaintiffs.

Lex Machina defines a High-Volume Plaintiff as an entity that has filed 10 or more cases within a 365 day span.  

High-Volume Plaintiffs (shown in orange below) also account for most of the unpredictability and volatility in patent case filings.

Fig. 5:  High volume plaintiff cases filed 2011-2017 Q3, by week