Patent News

Nov. 7, 2014

Intellectual Asset Management: A tale of two press releases – Unified Patents quietly changes its NPE tune, by Joff Wild

This article originally appeared in Intellectual Asset Management on November 7, 2014.

On 28th October we ran a story headlined “NPE suits down a massive 35% in the third quarter of the year as Alice and the AIA take their toll”. It was based on a press release published by Unified Patents that had its own dramatic headline: “88% of the Decline in Patent Litigation Activity in the 3Q 2014 is the Result of Fewer NPE Law Suits”. The opening two paragraphs of the release read:

Patent litigation filings declined dramatically in the third quarter of 2014, with 301 of the 343 drop in suits filed over the second quarter, or 88%, attributed to declining NPE activity in High Tech. This is an indication that the American Invents Act and current court rulings are having the intended effect of dissuading frivolous NPE suits.

“It’s difficult to determine precisely what has led the to the decline, but it is generally believed that new AIA rules and the Alice ruling on the software patentability are making an impact on NPEs ability to assert low quality patents,” said Shawn Ambwani, Chief Operating Officer of Unified Patents, the only organization that deters abusive patent litigation and never pays NPEs. “Patent litigation is becoming riskier, more costly and time consuming in areas of high technology since many tech patents asserted by NPEs have traditionally had significant validity issues.”

At the bottom of the release there were a series of charts that illustrated the declines in graphic form. Unified Patents’ chief operating officer Shawn Ambwani also supplied IAM with a few additional quotes: “It is clear litigation in general did not change in quarter 3, only NPE suits in high tech had a great tumble. We cannot be clear as to the causation, but can make some good guesses, which include Alice and the America Invents Act.” And: “My guess would be that NPEs are very fragile when it comes to asserting if the ROI is more uncertain. The doubt that AIA and Alice have added has been enough to dramatically change the picture. By contrast, operating companies are usually asserting for more than just monetary reasons and often have deeper pockets as well.”

We linked to the press release in the blog and provided our own comment at the bottom of the story to the effect that with the decline in patent litigation recorded not only by Unified Patents, but also by Lex Machina, the case for legislative patent reform in the US had been further weakened – especially when seen alongside a series of other developments. The blog has gone on to become among the most read of the last month. That should be the end of it, but it is not.