Patexia Insight 99: Most Active Companies in Patent Litigation (2021)
Last week we published the list of top patent litigators of 2021 (Patexia Insight 98). This week we are going to identify the most active companies in district court patent litigation. The study is based on the latest numbers published in our 2021 Patent Litigation Intelligence Report last month. The report covered 11,886 defendants or plaintiffs in district courts for a 3-year period between July 1, 2017, through June 30, 2020.
During this period, a total of 10,552 patent cases were filed. The Patexia data team reviewed entities involved to identify the relationship between them and tried to correctly associate subsidiaries to their parent companies. There were many entities (e.g., limited liability corporations) especially on the plaintiff side that were formed solely for the purpose of licensing and patent litigation. For some of these entities, it was not always possible to find out the real party in interest or the beneficiaries as there was little information available.
After we linked and combined such entities, we counted a total of 3,916 plaintiffs and 8,872 defendants. Many companies were active on both sides while some only acted as plaintiffs or defendants.
We realized that some entities had filed hundreds of lawsuits based on only a handful of patents. Although in terms of the number of cases, these entities were very active, the patents involved in all those lawsuits were very limited. Therefore, we decided to define a new metric to measure the activity which was a function of both the number of cases as well as the number of unique patents:
Activity Score = Weighted Average of Number of Cases and Unique Patents
Most Active Defendants
The following table shows the top 10 most active defendants based on our definition of activity. The table also shows the Activity Score, the number of defendant cases and the number of unique patents. As you can see in the table, the top 10 account for more than 8% of all patent lawsuits filed during the period.
Samsung Electronics is ranked first with a total of 147 cases and Apple is ranked second with 163 cases. Although Apple has had more cases, the unique patents involved in all those cases (263 patents) were smaller than Samsung (386 patents).
| Defendant Activity Ran | Company | Defendant Activity Score | Defendant Cases | Defendant Unique Patents |
|---|---|---|---|---|
| 1 | Samsung Electronics | 96.27% | 147 | 386 |
| 2 | Apple | 80.88% | 163 | 263 |
| 3 | LG Electronics | 58.38% | 94 | 227 |
| 4 | Amazon | 53.01% | 93 | 194 |
| 5 | 49.10% | 90 | 173 | |
| 6 | Microsoft | 44.72% | 81 | 159 |
| 7 | ZTE USA | 38.74% | 64 | 148 |
| 8 | Huawei Technologies | 35.02% | 61 | 129 |
| 9 | Philips | 33.38% | 50 | 135 |
| 10 | Verizon | 32.14% | 53 | 123 |
All top 10 companies are in the tech sector with the two of the largest smartphone makers Samsung and Apple at the top.
The full report covers the top 1000 most active companies. In the report, we have also identified the top 3 firms that worked for each of these companies.
Since the district courts in some of the states such as Delaware or Texas were more active than others, some firms and attorneys within these states acted only as local counsel for either defendants or plaintiffs. We decided to dedicate a separate section of the report to local counsel and then found out which firms benefited the most from these lawsuits.
For example, the top 3 law firms that represented Samsung as defendants for some of those 147 cases, were Arnold & Porter (19 Cases), O'Melveny & Myers (18 Cases) and Potter Minton (17 Cases). For Apple, the top 3 firms included DLA Piper (35 Cases), Goldman Ismail (35 Cases), and Desmarais LLP (16 Cases).
Although both companies have worked with many different firms, comparing the above 6 firms clearly shows that Apple is investing and counting more on smaller firms. For example, Desmarais LLP is not among the Am Law 100 but as we published the list of some of the best performing attorneys in Patexia Insight 98, John Desmarais is one of the best patent litigators in the nation. His firm has been growing and they have been representing other big tech companies as well.
We believe this choice of the firm for Apple gives them much better control over their litigation budget. The company works with some of the best attorneys in the nation while at the same time keeps the cost relatively low.
Most Active Plaintiffs
The activity is very different on the plaintiff’s side. As we explained earlier, we only identified 3,916 entities acting as plaintiffs in 10,552 district court cases. This is less than half of the number of defendants. The following table shows the top 10 most active plaintiffs for the period of our study. These 10 entities account for more than 12 percent of all lawsuits filed.
Our immediate observation is that some of the very popular NPEs (non-practicing entities) such as Acacia, WiLan, and Intellectual Ventures that were very active a decade ago, are not among the top ten and it seems that they have given their place to new players such as Uniloc, IP Edge LLC and a group of entities controlled by Leigh Rothschild. We believe the activity of some of these entities has significantly contributed to the recent increase in lawsuits, especially in 2020.
Our second observation is the presence of a number of biotechnology and healthcare companies in the top 10 including Roche, Genetech and City of Hope. We plan to look at this later to see if this increase in the plaintiff-side litigation by pharmaceutical companies is just a coincidence or is part of a bigger strategy. There have been talks that this may spill over to the ITC court as well (e.g., biosimilar).
We used the same activity formula to consider both unique patents and cases. For example, IP Edge LLC was ranked second with 453 cases while Uniloc was ranked first with 310 cases. This is because Uniloc had filed those 310 cases using 89 unique patents while IP Edge had used only 46 unique patents.
| Plaintiff Activity Rank | Company | Plaintiff Activity Score | Plaintiff Cases | Plaintiff Unique Patents |
|---|---|---|---|---|
| 1 | Uniloc | 86.96% | 310 | 89 |
| 2 | IP Edge LLC | 71.01% | 453 | 46 |
| 3 | Roche | 48.75% | 10 | 71 |
| 4 | Leigh Rothschild Patent Holding Companies | 48.65% | 377 | 23 |
| 5 | Dominion Harbor Enterprises | 48.02% | 40 | 66 |
| 6 | Genentech, Inc | 46.97% | 13 | 68 |
| 7 | City of Hope | 46.21% | 12 | 67 |
| 8 | Cedar Lane Technologies Inc. | 37.47% | 57 | 48 |
| 9 | Seoul Semiconductor Co Ltd | 35.52% | 13 | 51 |
| 10 | Seoul Viosys Co | 35.52% | 13 | 51 |
Uniloc had used multiple entities to file these 310 cases but almost all of them had similar names (i.e., Uniloc was part of the name). On the other hand, IP Edge LLC had used a variety of entities with different names to file these 453 cases. We did our best to detect as many as possible and identified 26 such entities. The list included Encoditech LLC, Magnacross LLC, Anuwave LLC, Guada Technologies LLC, Kaldren LLC, Zavala Licensing LLC, Digi Portal LLC, Karamelion LLC, Altair Logix LLC, Hydro Net LLC, Tunnel IP LLC, Sapphire Crossing LLC, Cassiopeia IP LLC, Kaleasy Tech LLC, Sonohm Licensing LLC, Zyrcuits IP LLC, Aperture Net LLC, Stormborn Technologies LLC, Swirlate IP LLC, Celebration IP LLC, Nitetek Licensing LLC, Karetek Holdings, Coretek Licensing LLC, Raindrops Licensing LLC, Mellaconic IP LLC, and Moxchange LLC.
Plaintiff side attorneys and law firms usually have a vested interest in the outcome of the case. Some may work on contingency while some others may use a hybrid model. In recent years, litigation financing has also become very popular and many such cases may be funded by litigation funds.
We believe there will be even more funding available for litigation in the following years as income generated from litigation is normally decoupled from the general economy and investors will need a safe place to hide and park their money in case of the stock market crash. Therefore, this means more money will flow into litigation funds and we may even see a larger increase in litigation in 2021 and beyond.
Similar to the defendant side, we looked at the top 3 firms that represented the top 2 plaintiffs (excluding local counsel). The top 3 firms that represented Uniloc in some or all of those 310 cases were Prince Lobel Tye (208 Cases), Nelson Bumgardner Albritton (154 Case), and Etheridge Law Group (79 Cases). The top 3 for IP Edge LLC were different. The entity had worked closely with Direction IP Law (181 Cases), Stamoulis & Weinblatt (131 Cases), and Rabicoff Law (78 Cases). Our full report covers the top 3 for all the top 1000 most active companies.
In the following weeks, we plan to publish some of the best law firms for patent litigation in 2021. We will also analyze the recent drop in the number of issued patents and consider the impacts of the global economy and COVID-19 on corporate IP spending. Stay tuned...