Patent Trolls Win Bigger Judgements than Companies that Are Actually Doing Business With Their Patents

The latest PricewaterhouseCoopers‘ Patent Litigation Study found that between 2006 and 2011, the median damages award for nonpracticing entities (the so-called “trolls”) was $6.9 million, compared to $3.7 million for practicing entities. The median damages award for patent cases overall was $4 million and the number of these cases is higher than ever.

While the non-practicing entities don’t win as often as the practicing entity, when they do win, they win big. Although it might seem counter-intuitive that trolls get higher awards, that is probably because they are better positioned to “forum shop” than the company that is developing and operating a business around the patents. The report noted that cases by non-practicing entities are concentrated in a relatively small number of forums, with 10 courts accounting for 56 percent of nonpracticing entity suits.  It looks like most plaintiffs are banking on Texas justice: the Eastern District of Texas alone accounted for 12 percent of decisions involving nonpracticing entities.

For both practicing and nonpracticing entities, the report bears out the common sense belief among lawyers that juries give higher awards than judges. Between 2006 and 2011, patentees prevailed at jury trials 76 percent of the time, compared to 59.3 percent of the time at bench trials.

So, if you are a patent plaintiff, you want a jury trial in Texas if at all possible. The alleged infringer wants to be almost anywhere else, taking his or her chances with a judge.

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