IP litigation in U.S. district courts: 1994-2014

Iowa Law Review

Volumn 101, Issue 3, 2016, Pages 1065-1112

  Sag, Matthew ^a,b  

^a LOYOLA UNIVERSITY CHICAGO   (United States)

^b Institute for Consumer Antitrust Studies   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84994141225     PISSN: 00210552     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (107)

1. One of the few long-term studies of IP litigation across more than one field is William M. Landes, An Empirical Analysis of Intellectual Properly Litigation: Some Preliminaiy Results, 41 HOUS. L. REV. 749 (2004) (analyzing annual summary data on trademark, copyright, and patent litigation from 1978-2000, and focusing on win rates and the number of trials).
2. The federal courts have exclusive jurisdiction over copyright and patent cases; however, cases arising under the Federal Lanham Trademark Act are subject to concurrent federal and state jurisdiction. The McCarthy treatise notes that "[a]s a matter of litigation strategy, however, most plaintiffs appear to bring such cases in the federal courts, perhaps on the assumption that federal judges are more likely to be familiar with problems of trademark infringement under a federal statute." 6 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 32:1, at 32-10 to-11 (4th ed. 2012).
3. George L. Priest & Benjamin Klein, The Selection, of Disputes for Litigation, 13 J. LEGAL STUD. 1, 2 (1984). David Hoffman, Alan Izenman, and Jeffrey Lidicker make a compelling argument that we should study dockets and think more seriously about why some filed cases generate written opinions and others do not.
4. See generally David A. Hoffman et al., Dockelology, District Courts, and Doctrine, 85 WASH. U. L. REV. 681 (2007).
5. For a recent example, see generally J. Jonas Anderson & Peter S. Menell, Informal Deference: A Historical, Empirical, and Normative Analysis of Patent Claim Construction, 108 NW. U. L. REV. 1 (2014) (analyzing claim construction from the Federal Circuit between 2000 and 2011).
6. See, e.g., John R. Allison et al., Understanding the Realities of Modern Patent Litigation, 92 TEX. L. REV. 1769 (2014) (analyzing outcomes in all patent lawsuits filed in a federal district court between January 1, 2008 and December 31, 2009);
7. Christopher A. Cotropia et al., Unpacking Patent Assertion Entities (PAEs), 99 MINN. L. REV. 649 (2014) (conducting a detailed review of the entity status of patent litigants in 2010 and 2012 to determine whether "patent troll" litigation is in fact increasing);
8. Jay P. Kesan & Gwendolyn G. Ball, How Are Patent Cases Resolved? An, Empirical Examination of the Adjudication and Settlement of Patent Disputes, 84 WASH U. L. REV. 237 (2006) (analyzing what stage patent litigation ends and the cost associated with litigation).
9. Lex Machina provides access to cleaned and verified PACER data for district court patent litigation. See Resources, LEX MACHINA, https://www.lexmachina.com/resources (last visited Jan. 7, 2016);
10. see also DOCKET NAVIGATOR, http://home.docketnavigator.com (last visited Jan. 7, 2016).
11. There are several excellent empirical studies related to copyright outside the context of litigation. See, e.g., Christopher Buccafusco & Christopher Jon Sprigman, The Creativity Effect, 78 U. CHI. L. REV. 31 (2011);
12. Peter DiCola, Money from Music: Survey Evidence on Musicians' Revenue and Lessons About Copyright Incentives, 55 ARIZ. L. REV. 301 (2013);
13. Paul J. Heald, Property Rights and the Efficient Exploitation of Copyrighted Works: An Empirical Analysis of Public Domain and Copyrighted Eiction Bestsellers, 92 MINN. L. REV. 1031 (2008).
14. See generally Matthew Sag, Empirical Studies of Copyright Litigation, in II RESEARCH HANDBOOK ON THE ECONOMICS OF INTEEEECTUAE PROPERTY LAW (Peter S. Menell & David L. Schwartz eds., forthcoming 2016).
15. Empirical studies of copyright litigation include Barton Beebe, An Empirical Study of U. S. Copyrighl Fair Use Opinions, 1978-2005, 156 U. PA. L. REV. 549 (2008);
16. Deborah R. Gerhardt, Copyright Publication: An Empirical Study, 87 NOIRE DAME L. REV. 135 (2011) (providing an empirical study of 446 copyright decisions reported addressing publication);
17. Katherine Lippman, The Beginning of the End: Preliminary Results of an Empirical Study of Copyright Substantial Similarity Opinions in the U. S. Circuit Courts, 2013 MICH. ST. L. REV. 513 (providing an empirical study of 234 reported appellate court opinions ruling on the issue of substantial similarity in copyright law);
18. Jiarui Liu, Copyright Injunctions After eBay: An Empirical Study, 16 LEWIS & CEARK L. REV. 215 (2012) (providing an empirical study based of reported copyright-injunction decisions during the period from May 15, 2006, to June 1, 2010);
19. Neil Weinstock Netanel, Making Sense of Fail Use, 15 LEWIS & CEARKL. REV. 715 (2011) (studying fair use cases between 2006 and 2010);
20. and Matthew Sag, Predicting Fair Use, 73 OHIO ST. L. J. 47 (2012) (studying district court fair use cases between 1978-2010).
21. Empirical studies of trademark litigation include Barton Beebe, An Empirical Study of the Mullifaclor Tests for Trademark Infringement, 94 CALIF. L. REV. 1581 (2006) (providing an empirical study of reported federal district court trademark opinions applying a multifactor test for the likelihood of consumer confusion for the period of 2000-2004). There are, of course, authors who have simply read and synthesized all the relevant cases in an area without resorting to tables, graphs or equations.
22. See, e.g., Pamela Samuelson, Unbundling Fair Uses, 77 FORDHAM L. REV. 2537 (2009).
23. See Christopher A. Cotropia & James Gibson, Copyright's Topography: An Empirical Study of Copyright Litigation, 92 TEX. L. REV. 1981, 1982 (2014).
24. There is an ongoing debate about the history of the term "intellectual property" and the normative implications of using IP as an umbrella term for the distinct fields of copyright, patent, and trademark law. See, e.g., Justin Hughes, A Short History of "Intellectual Properly" in Relation to Copyright, 33 CARDOZO L. REV. 1293 (2012);
25. Justin Hughes, Copyright and Incomplete Historiographies: Of Piracy, Properlization, and Thomas Jefferson, 79 S. CAL. L. REV. 993 (2006);
26. Mark A. Lemley, Property, Intellectual Properly, and Free Riding, 83 TEX. L. REV. 1031 (2005);
27. Mark A. Lemley, Romantic Authorship and the Rhetoric of Properly, 75 TEX. L. REV. 873, 895-96 (1997)
28. (reviewing JAMES BOYLE, SHAMANS, SOFTWARE, AND SPLEENS: LAW AND THE CONSTRUCTION OF THE INFORMATION SOCIETY (1996)).
29. Admin. Office of the U. S. Courts, Frequently Asked Questions: What Is a Nature of Suit?, PACER: PUB. ACCESS TO CT. ELECTRONIC RECORDS, https://www.pacer.gov/psc/hfaq.html (last visited Jan. 7, 2016) (click on "PACER Case Locater" tab; then select "What is a nature of suit?" from menu). A complete list of NOS codes is available on the PACER website.
30. See Admin. Office of the U. S. Courts, Nature of Suit, PACER: PUB. ACCESS TO CT. ELECTRONIC RECORDS, https://www.pacer.gov/documents/natsuit.pdf (last visited Jan. 7, 2016).
31. See generally Matthew Sag, Empirical Studies of Copyright Litigation: Nature of Suit Coding (Loyola Univ. Chi. Sch. of Law, Pub. Law & Legal Theory Research Paper No. 2013-017, 2013), http://papers.ssrn. com/sol3/papers.cfm?abstract-id=2330256 (investigating consequences of relying on NOS coding).
32. See Admin. Office of the U. S. Courts, About Us, PACER: PUB. ACCESS TO CT. ELEC TRONIC RECORDS, https://wtvw.pacer.gov/about.html (last visited Jan. 7, 2016).
33. These data sets are available for download on my website. Data Sets, MATTHEW SAG, http://matthewsag.com/?page-id=19 (last visited Jan. 7, 2016).
34. This Part extends the data in my recent empirical study of Internet filesharing litigation. See generally Matthew Sag, Copyright Trolling, an Empirical Study, 100 IOWA L. REV. 1105 (2015).
35. RIAA v. The People: Fie Years Later, ELECTRONIC FRONTIER FOUND. (Sept. 30, 2008), http://mvw.eff.org/wp/riaa-v-people-five-years-later.
36. See Metro-Goldwyn-Mayer Studios Inc. V. Grokster, Ltd., 545 U. S. 913, 963 (2005) (Breyer, J., concurring).
37. Eriq Gardner, New Litigation Campaign Quietly Targets Tens of Thousands of Movie Down-loaders, HOLLYWOOD REP.: THR, ESQ. (Mar. 30, 2010, 10:29 AM), http://reporter.blogs.com/thresq/2010/03/new-litigation-campaign-targets-tens-of-thousands-of-bittorrent-users.html (quoting the attorney for one plaintiff explaining that the purpose of the lawsuit was to "creat[e] a revenue stream and monetiz[e] the equivalent of an alternative distribution channel").
38. 17 U. S. C. § 504 (c) (2012). The only prerequisite for statutory damages is copyright registration.
39. "Ordinary" in the sense that there is no case for punitive damages. Courts may award punitive damages in some circumstances, but the scope for these has been drastically limited by recent Supreme Court authority. See, e.g., State Farm Mut. Auto. Ins. Co. V. Campbell, 538 U. S. 408, 425 (2003) ("[F]our times the amount of compensatory damages might be close to the line of constitutional impropriety.").
40. In one case, ajury awarded statutory damages of more than 500 times the $54 worth of music the defendant downloaded on a peer-to-peer filesharing network. Capitol Records Inc. V. Thomas, 579 F. Supp. 2d 1210, 1227 (D. Minn. 2008);
41. see also Capitol Records, Inc. V. Alaujan, 593 F. Supp. 2d 319 (D. Mass. 2009).
42. See Pamela Samuelson & Tara Wheadand, Statutory Damages in Copyright Law: A Remedy in Need of Reform, 51 WM. & MARY L. REV. 439, 446-51 (2009) (summarizing the legislative history of the 1909 Copyright Act).
43. See generally EXEC. OFFICE OF THE PRESIDENT, PATENT ASSERTION AND U. S. INNOVATION (2013);
44. Colleen Chien, Patent Trolls by the Numbers, PATENTLY-O (Mar. 14, 2013), http://www.patendyo.com/patent/2013/03/chien-patent-trolls.html.
45. False marking claims were a significant source of patent litigation in 2010 due to an influx of claims in the wake of the Federal Circuit's 2009 decision in Forest Group, Inc. V. Bon Pool Co., 590 F.3d 1295 (Fed. Cir. 2009).
46. At the time, false marking claims could be brought by any member of the public. The Bon Tool case triggered a rush to the courthouse by holding that the civil penalty for false patent marking should be calculated per marked product instead of per category of product. See R. David Donoghue, Horn False Patent Marking Cases and the Recession Have Drastically Changed Intellectual Properly Litigation, in THE IMPACT OF RECENT PATENT LAW CASES AND DEVELOPMENTS 117, 118 (Eddie Former ed., 2011 ed. 2010). Based on Cotropia, Kesan, and Schwartz's painstaking review of patent cases filed in 201 o and 2012, there are 653 false marking cases in data collected in this Article for the year 2010, compared to 2818 other patent cases. See generally Cotropia et al., supra note 10. Cotropia, Kesan, and Schwartz actually identify 666 false marking cases in their data, but only 653 correspond to docket entries in the dataset for this Article. Id. at 665. These identified false marking cases have been excluded from the figures reported herein, unless otherwise noted. Data in years prior to 2010 may include some patent false marking cases, but the number is thought to be very low. Cotropia, Kesan, and Schwartz identified no false marking cases in 2012. Id. Among many recent legislative reforms to patent law, in 2011, standing to bring false marking claims was confined to the U. S. Government and entities that have been competitively injured by false marking, thus effectively neutering the category.
47. See 35 U. S. C. § 292 (2012).
48. EXEC. OFFICE OF THE PRESIDENT, supra note 44, at 5;
49. Leahy-Smith America Invents Act ("AIA"), Pub. L. No. 112-29, 125 Stat. 284 (2011)
50. (codified in scattered sections of 35 U. S. C.).
51. see also Greg Reilly, Aggregating Defendants, 41 FLA. ST. U. L. REV. 1011, 1033 (2014).
52. See generally Robin Feldman et al., The AIA 500 Expanded: The Effects of Patent Monetization Entities (U. C. Hastings Research Paper No. 45, 2013), http://papers.ssrn. com/sol3/papers.cfm?abstract-id=2 247195.
53. See Dockets, BLOOMBEKRG L., https://wwtv. bloomberglaw.com/dockets (last visited Jan. 7, 2016) (subscription required).
54. Colleen V. Chien, Of Trolls, Davids, Goliaths, and Kings: Narratives and Evidence in the Litigation of High-Tech Patents, 87 N. C. L. REV. 1571, 1579 (2009).
55. see also Regional Economic Accounts, BUREAU ECON. ANALYSIS, http://www.bea.gov/regional/index.htm (last modified Nov. 19, 2015).
56. On the effects of gravity on cartoon coyotes, see generally CIIUCK JONKS, CIIUCK AMUCK: THE LIFE AND TIMES OF AN ANIMATED CARTOONIST (2d ed. 1999).
57. Shyamkrishna Balganesh, The Uneasy Case Against Copyright Trolls, 86 S. CAL. L. REV. 723, 739-41 (2013).
58. E.g., Righthaven, LLC v. Hoehn, 792 F. Supp. 2d 1138, 1148-51 (D. Nev. 2011);
59. ∗2-3 (D. Nev. Oct. 19, 2010);
60. ∗2-4 (D. Nev. Sept. 17, 2010) (finding a sufficient meritorious fair use defense to set aside a default).
61. Righthaven LLC v. Democratic LInderground, LLC, 791 F. Supp. 2d 968, 973 (D. Nev. 2011).
62. See Silvers v. Sony Pictures Entm't, Inc., 402 F.3d 881, 884 (9th Cir. 2005) (en banc) (emphasis omitted)
63. (quoting 17 U. S. C § 501 (b) (2000)).
64. Democratic Underground, LLC, 791 F. Supp. 2d at 972. Section 7.2 of the Strategic Alliance Agreement between Righthaven and Stephens Media provided:
65. See Silvers, 402 F.3d at 884-85.
66. Ian Polonsky, You Can'l Go Home Again: The Righthaven Cases and Copyright, Trolling on the internet, 36 COLUM. J. L. & ARTS 71, 87-90 (2012).
67. Class Action Complaint, Dryer v. Nat'l Football League, 689 F. Supp. 2d 1113 (D. Minn. 2010) (No. og-CV-02182).
68. Dryer, slip op. at 1 (D. Minn. April 5, 2013).
69. Dryer, slip op. at 1 (D. Minn. Nov. 4, 2013).
70. Michael Lipkin, NFL Bests Players Who Spurned $42M Publicity Rights Deal, LAW 360 (October 10, 2014, 10:41 PM), http://www.law360.com/articles/586613/nfl-bests-players-whospurned-42m-publicity-rights-deal.
71. Dryer v. Nat'l Football League, 55 F. Supp. 3d 1181, 1304 (D. Minn. 2014) ("The NFL is entitled to use footage from NFL games to create expressive works telling the story of the NFL. Plaintiffs have failed to raise any genuine issues of fact as to any of their claims, and those claims must therefore be dismissed.").
72. See, e.g., Julie Creswell, So Small a Town, So Many Patent Suits, N. Y. TIMES (Sept. 24, 2006), http://www.nytimes.com/2006/09/24/business/24ward.html (describing a "mushrooming" patent docket with "hungry plaintiffs' lawyers, speedyjudges and plaintiff-friendlyjuries") Justice Scalia went so far as to call the Eastern District of Texas a "renegade jurisdiction []."
73. Transcript of Oral Argument at 10-11, eBay Inc. V. MercExchange, L. L. C., 547 U. S. 388 (2006) (No. 05-130).
74. See Daniel Herman & Greg Reilly, Forum Selling, 89 S. CAL. L. REV (forthcoming 2016) (manuscript at 26) (on file with the author).
75. See J. Jonas Anderson, Court Competition for Patent Cases, 163 U. PA. L. REV. 631, 671 (2015);
76. Defendants shoulder the costs of discovery because "the bulk of the relevant evidence usually comes from the accused infringer." In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009)
77. (quoting Neil Bros. Ltd. V. World Wide Lines, Inc., 425 F. Supp. ad 325, 330 (E. D. N. Y. 2006));
78. Standing Order Regarding Letter Briefs, Motions in Limine, Exhibits, Deposition Designations, and Witness Lists (E. D. Tex. Apr. 23, 2014).
79. see also Greg H. Gardella & Emily A. Berger, United Stales Peexamiuation, Procedures: Rerent Trends, Strategies and Impact on Patent Practice, 8 J. MARSHALL REV. INTELL. PROP. L. 381, 398 (2009);
80. Matthew Smith, Stays Pending Reexamination, Patently-O (Nov. 1, 2009), http://patendyo.eom/patent/2009/11/the-following-guest-post-is-bymatthew-sniiththe-grant-rate-of-motions-to-stay-is-highly-judge-dependent-and-somewhat-less-ob.html.
81. FED. R. CIV. P. 20 (a) (a) (A) - (B).
82. l 15. See, e.g., MyMail, Ltd. V. Am. Online, Inc., 223 F. R. D. 455, 457 (E. D. Tex. 2004).
83. 16. In re EMC Corp., 677 F.3d 1351, 1359 (Fed. Cir. 2012).
84. Leahy-Smith America Invents Act ("ALA"), Pub. L. No. 112-29, 125 Stat. 284. 332-33 (2011)
85. (codified in scattered sections of 35 U. S. C.).
86. see also David O. Taylor, Patent Misjoinder, 88 N. Y. U. L. REV. 652, 719-20 (2013);
87. Jan Wolfe, East Texas Judges Test Joinder Limits in Patent Reform's Wake, CORP. COUNS., Aug. 22, 2012.
88. Paul R. Gugliuzza, The New Federal Circuit Mandamus, 45 IND. L. REV. 343, 377 (2012) (noting that "the court's system for assigning cases to its judges permits plaintiffs to predict with a great deal of certainty which judge will hear their case");
89. Kimberly A. Moore, Forum Shopping in Patent Cases: Does Geographic Choice Affect Innovation ?, 79 N. C. L. REV. 889, 901 (2001);
90. see also Jeanne C. Fromer, Patentography, 85 N. Y. U. L. REV. 1444, 1451-55 (2010).
91. Beverly Hills Fan Co. V. Royal Sovereign Corp., 21 F.3d 1558, 1564-65 (Fed. Cir. 1994).
92. Red Wing Shoe Co. V. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir. 1998).
93. Burger King Corp. V. Rudzewicz, 471 U. S. 462, 476 (1985).
94. Int'lShoe Co. V. Washington, 326 U. S. 310, 316 (1945)
95. (quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940)).
96. AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1365 (Fed. Cir. 2012).
97. Beverly Hills Fan Co., 21 F. 3d at 1563-65.
98. The Federal Circuit has announced that Beverly Hills Fan remains the controlling precedent in this area, even after the Supreme Court's apparent questioning of the stream of commerce theory of personal jurisdiction in J McInlyre Machinery, Ltd. V. Nicastro, 131 S. Ct. 2780 (2011).
99. See Nuvoton Tech., 689 F.3d at 1363 ("[T]he law remains the same after McIntyre.").
100. 28 U. S. C. § 1404 (a) (2012).
101. citing Andrei Iancu & Jay Chung, Real Reasons the Eastern District of Texas Draws Patent Cases-Beyond Lore and Anecdote, 14 SMU SCI. & TECH. L. REV. 299, 315 (2011).
102. see also In re TS Tech USA Corp., 551 F.3d 1315, 1319-22 (Fed. Cir. 2008).
103. See generally Daniel Herman, Jurisdictional Competition and the Evolution of the Common Law, 74 U. CHI. L. REV. 1179 (2007).
104. Rochelle Cooper Dreyfuss, The Federal, Circuit: A Case Study in Specialized Courts, 64 N. Y. U. L. REV. 1, 2-4 (1989) (summarizing Congress' motivation for creating the court).
105. with Mark A. Lemley, Where to File Your Patent Case, 38 AIPLA Q. J. 1 (2010) (discussing how patent owners forum shop their cases).
106. William L. Cary, Federalism and Corporate Law: Reflections upon Delaware, 83 YALE L. J. 663, 666, 670 (1974)
107. See Louis K. Liggett Co. V. Lee, 388 U. S. 517, 558-59 (1933) (Brandeis, J., dissenting).