IP Litigation Trends in United States District Courts: 1994—2014

… Regional Variation

Professor Matthew SagLoyola University of Chicago School of Law

September 20, 2014

Please visit www.matthewsag.com or email matthewsag@gmail.com for a copy of these slides or the underlying data for replication. Working paper available soon at www.ssrn.com

• Substantial regional variation in rates of IP litigation• Instability/Stability in regional allocation• Importance of economic factors• Differences between copyright, patent and trademark • Idiosyncratic factors

• E.g. Copyright John Doe litigation?• Righthaven LLC in Nevada in 2010• Forum selling by the ED Texas in patent law

State IP cases Copyright Patent Trademark GDP Pop. GDP PP

California 1 1 1 1 1 1 11

New York 2 2 4 2 3 3 6

Texas 3 3 2 4 2 2 15

Florida 4 4 6 3 4 4 38

Illinois 5 6 5 5 5 5 13

Pennsylvania 6 5 9 7 6 6 29

New Jersey 7 8 7 6 8 11 7

Delaware 8 42 3 33 41 45 1

Michigan 9 7 8 8 9 8 36

Ohio 10 9 12 10 7 7 31

Table 4: Top 10 States for IP Litigation, with Subject Area and State GDP and Population Rankings

• At the state level things mostly make sense

• We can drill into a lot more detail on the district level– Trademark and Copyright ranks generally correlate– Patent ranks generally correlate with

(copyright+trademark)• Worth thinking about why some districts are

copyright/patent/trademark heavy

Figure 5 District Rankings, Copyright Compared to Trademark (2004-2014)

Figure 6 District Rank in terms of Patent versus Copyright and Trademark Combined (2004-2014)

Figure 7 District Court Ranks for Patent Litigation 1994-2014

THE ROLE OF THE LOCAL ECONOMY IN FEDERAL INTELLECTUAL PROPERTY LITIGATION

Part IV

Analyzing quarterly patent filings from 1971 to 2009, Alan Marco, Shawn Miller and Ted Sichelman (“MMS”) find that economic downturns have a counter-cyclical impact on the initiation of patent litigation.

[A] 1% increase in GDP leads to a 5% decrease in patent litigation four quarters later in the earlier sub-period [1971-1991] and a 6% decrease two quarters later in the later sub-period [1986-2009].

Figure 8 Panel Data on State GDP and Filings

Independent Variables (1) All IP Cases (2) Copyright (3) Patent (4) TrademarkReal GDP .0003**

(0).0003**

(0).0002**

(0).0004**

(0)Change in Real GDP 1.3958**

(.4789)1.756* (.8448)

1.1137 (.8253)

1.2591 (.7338)

GDP Per Person .0004* (.0002)

–.0003 (.0002)

.0016** (.0005)

.0001 (.0001)

GDP (ITC) .0009** (.0003)

.001* (.0005)

.0011** (.0003)

.0005 (.0003)

Year –.9716** (.3071)

-.5287 (.5721)

–1.12 (2.47)

-.09 (.33)

Circuit .7008 (.3739)

-.2658 (.7854)

–9.35** (2.65)

.17 (.38)

Nature of Suit .71** (.1521)

Constant 1310.34* (615.64)

1040.12 (1144.86)

721.95 (1187.66)

3971.08** (790.27)

N 2044 697 675 690r-squared .78 .72 .78 .88

Regression ResultsLinear Regression with State Fixed EffectsDV Cases Filed

Variables that ‘predict’ IP litigation

• Real GDP (wealth)– All models

• Change in Real GDP (growth) – All IP & Copyright. – Not in Patent or Trademark (but are significant without SFE)

• GDP per person is negative– All IP & Patent. – Not in Copyright or Trademark– (Trademark and Patent were negative and significant without SFE)

• Real GDP in the Information Technology and Communications Sector

– All, Copyright & Patent. – Not in Trademark

Independent Variables (5) All IP Cases (6) Copyright (7) Patent (8) TrademarkReal GDP 0

(0)0

(0).0001

(0)0

(0)Change in Real GDP 1.98**

(.69)4.46** (1.63)

.77 (.84)

.86 (1.05)

GDP Per Person –.0008 (0)

--.0013 (0)

–.0014 (0)

.0005 (0)

GDP (ITC)–.0001

(0).0005

(0)–.0009

(0).0002

(0)Year .63

(.76)1.89 (1.7)

.74 (1.22)

–.73 (.95)

Circuit -2.31 (2.51)

-.35 (2.97)

-3.76 (6.46)

–2.86 (2.85)

Nature of Suit –.76** (.24)

Constant –565.17 (1506.35)

–3730.4 (3341.38)

–1364.29 (2399.94)

1477.71 (1878.65)

N 2477 820 819 838r-squared .03 .05 .06 .05

Regression ResultsLinear Regression with State Fixed EffectsDV Change in Cases Filed

• Change in cases filed– Significant

• Change in Real GDP – for All and Copyright– Not Patent & Trademark

– Not significant • Real GDP• GDP Per Person• ITC GDP

Independent VariablesAll IP Cases1 year lags

All IP Cases2 year lags

All IP Cases1 & 2 year lags

Real GDP (1 Year Lag).0003**

(0).0014**

(0)

Real GDP (2 Year Lag).0003**

(0)-.0012**

(0)

Change in GDP (1 Year Lag)1.58**

(.54)-.87 (.58)

Change in GDP (2 Year Lag).36 (.6)

-.57 (.51)

ICT GDP (1 Year Lag).0008

(0).003

(0)

ICT GDP (2 Year Lag).0008

(0)-.0022

(0)

Year Filed-1.83**

(.37)-2.24**

(.41)-1.71**

(.43)

Circuit.6

(.51).79

(.53).87

(.52)

Nature of Suit.55** (.15)

.49** (.15)

.49** (.15)

Constant3177.62**

(732.52)4049.37**

(826.19)2997.87**

(868.39)N 2469 2326 2326

r-squared .65 .64 .65

Regression Results, Linear Regression with State Fixed EffectsDV Cases Filed, Lagged GDP Variables