Patexia Insight 97: Which Firms Expanded their ITC Practice in 2020?
A few weeks ago, we reported the IP activity in 2020 (Patexia Insight 96). District Court, PTAB and ITC Section 337 litigation were all up significantly last year. As we are preparing our second annual ITC Intelligence Report, we are taking a closer look at the ITC Section 337 to understand how the landscape will shape in 2021 and beyond. This week, we will look at the lateral moves in 2020 and also the impact of the current economy and COVID-19 on the ITC to better understand its growth or decline ahead.
Last year, a total of 64 new ITC investigations were filed compared to 50 cases in 2019.
In 2020, we noticed many ITC partners and counsel switched firms. This indicates that firms are trying to expand their ITC market share. ITC investigations on average cost between $4M to $6M for the complainants and slightly less for the respondents. Numbers generally span a very wide range and can be as low as $900K and as high as $12M or more. We estimate the market for the ITC Section 337 to be around $500M to $750M per year. This explains why more firms are interested in gaining more market share in this growing area.
To identify the major ITC lateral moves, we only considered partners or counsels who were involved in at least 3 or more ITC investigations since 2015. Our data shows a total of 17 lateral moves since January 2020.
The following table lists all those attorneys who switched firms or started their own firm during this period (since January 2020).
Virtual firms such as Rimon and FisherBroyles which are benefiting from the pandemic managed to expand into this area. Rimon brought Jason Xu from White & Case while Paul Goulet and Steve Anzalone both left Winston & Strawn to join FisherBroyles. These firms usually offer a much better compensation compared to the traditional firms as their overhead is much lower. With the pandemic and normalization of work from home or remote offices, clients may be less concerned about the office location which helps these virtual firms in establishing themselves as key players in the market.
Some of the best firms with already a very strong ITC practice are still expanding their ITC group. For example, Kirkland & Ellis brought Kristina Cary from Mintz Levin.
Firms compete to get and retain top ITC partners. With this growing market, finding the right group has become more difficult. For example, Goodwin Proctor lost Mark Davis and Ron Pabis only after 2.5 years as they moved to Jenner & Block.
What’s Next? We believe the ITC market will continue to grow in 2021 and beyond. Most likely we will see another double-digit growth in the number of investigations in 2021. Here are some of our reasons:
Pandemic: While most district courts are delaying the trials and this may be the case for most of 2021, virtual trials are available at the US ITC. Companies may see this as an opportunity to get a faster trial which will increase the number of investigations.
Weak Economy: Many sectors of the US economy feel the slowdown either temporarily or permanently. This includes parts of the energy sector, automotive industry and semiconductor. The pressure on domestic industries in these sectors will lower the profit margins for these companies. As a result, their management will look into their intellectual properties as a way to improve their profit margin. ITC will be the ideal venue to help these companies reduce the competition.
This will create more competition between law firms for the ITC practice. Our recruiting team at Patexia has been helping several Am Law 100 firms that are looking to expand their ITC practice. We expect to see more ITC lateral moves in 2021.
If you can think of any other reasons beyond what we covered above that would help this market expansion further, please let us know (or comment below).