In the first quarter of 2017 we saw a continued decline in patent litigation. The district court litigation was down 26 percent to 1,012, compared to 1,346 in Q4 of 2016. And it was down 5 percent year over year (1,067 in Q1 of 2016). For the same period, Inter-Partes Review (IPR) was up 22 percent to 550, compared to 448 in Q4 of 2016. This increase was even sharper year over year. IPR saw a whopping increase of 64 percent in Q1 2017 versus Q1 2016, which saw 335.

IPR activity per quarter was at an all-time high in Q1 2017. Since its inception in September 2012, IPR has been gaining popularity as a tool to challenge the validity of patents in lawsuits or licensing deals. We have been closely tracking this from many angles (i.e., companies, law firms, judges, attorneys, patents, claims, et cetera). We’re curious to know if most of the IPR cases still are filed in response to district court litigation, or if it gradually is gaining popularity in licensing negotiations and patent transactions.

Patent litigation in district courts was at its lowest level since 2011. Although the litigation has dropped to pre-AIA levels, it is worth mentioning that post-AIA numbers are generally magnified because of joinder rules. As we discussed in Patexia Insight 7, the total number of unique patent assertions has been declining year over year. This means in terms of unique patent cases, we are at the lowest levels we have seen in the past several years.

IPR filings averaged about 137 cases per month in 2015 and 2016. However, in the first 3 months of 2017 the average increased to 183 cases per month. We showed in Patexia Insight 12 that IPR is heavily utilized by a small number of companies, and we believe this trend is continuing in 2017.

During Q1, we updated the status of all IPR cases and also did a complete analysis and review of Apple IPR cases (the number one user of this powerful tool). We have updated our database and now have similar data for all law firms (i.e., performance, attorneys, judges, clients, et cetera) as well as companies. Please contact us directly for more details. In addition, our data science team started to cover the claim-level data for each of the IPR challenges. This is now available for each of the IPR cases in the Patexia lawsuit and PTAB database. Users can create a free account and use the database.

Looking at the case-level status reported by the PTAB for more than 6,140 IPR challenges filed through the end of Q1 of 2017, we learned that as of April 9, 2017, about 26 percent of all challenges have received the Final Decision. About 32 percent of challenges have been denied institution for various reasons. And about 14 percent have been settled (Terminated-Settled). Another 26 percent of challenges are still pending (i.e., instituted, submitted, PO response filed, et cetera). We reported in recent Patexia Insights (e.g., Zond Case in Patexia Insight 32) that this status report may be confusing and inaccurate from the patent owner standpoint when many petitioners launch multiple attacks on the same group of patents. Other experts in the space took notice of our Zond case study recently, including IP Watchdog and IP CloseUp.

IPR Status	No. of Cases
Terminated-Denied	1949
FWD Entered	1636
Terminated-Settled	827
Instituted	693
Notice OF Filing Date Accorded	571
PO Response Filed	182
Submitted	135
Others	155

This year, as of April 9, 2017, PTAB is the number one venue for patent litigation with 571 cases, followed by Eastern District of Texas with 344 cases.

In the first quarter of 2017, we continued to see a decline in patent litigation compared to the previous quarters and compared to the same period of last year. This is occurring while IPR activity is at an all-time high. There was a sharp increase in IPR filing in Q1 of 2017 compared to the same period last year.

We have released a number of studies analyzing IPR challenges at the patent and case levels. We also focused on Apple as the number one company leveraging IPR in recent years. We plan to continue studying this, looking at the data from different angles.