Section 34 of the Leahy-Smith America Invents Act (“AIA”) mandated that the United States Government Accountability Office (“GAO”) conduct a study on the consequences of patent litigation by nonpracticing entities (NPEs).  As such, the GAO’s objectives were to determine (1) what is known about the volume and characteristics of recent patent litigation by NPEs; (2) what is known about the key factors that contribute to recent patent litigation trends; (3) what developments in the judicial system may affect patent litigation; and (4) what actions, if any, has the United States Patent and Trademark Office (“PTO”) recently taken that may affect patent litigation in the future.

As such, the GAO published a recent study that conducted an analysis of 500 patent infringement lawsuits in federal courts from 2007 to 2011.  The GAO found that the number of lawsuits increased by about a third from 2010 to 2011, most likely influenced by the anticipation of changes in the AIA which made several significant changes to the U.S. patent system.

The data also shows that companies that make products brought most of the lawsuits; NPEs brought about a fifth of all lawsuits; and that lawsuits involving software-related patents accounted for 89 percent of the increase in defendants over this period.

Stakeholders interviewed by the GAO who are knowledgeable in patent litigation identified three factors that likely contributed to recent patent infringement lawsuits. First, many lawsuits are related to the prevalence of patents with unclear property rights.  Second, the potential for large monetary awards from the courts can be an incentive to file a lawsuit. Third, the recognition by companies that patents are a more valuable asset than once assumed also may have contributed to recent lawsuits.

The judicial system is implementing new initiatives to improve the handling of patent cases in the federal courts and the PTO has taken several recent actions that are likely to affect patent quality and litigation in the future.

As a result of the study, the GAO recommends that the PTO consider examining trends in patent infringement litigation and consider linking this information to patent examination data to improve patent quality and examination.