22 October 2015

Almost Half Of Fully Litigated Patents Are Invalid

A 1998 study of 300 litigated patents found that 56% were held to be valid and that 46% were found to be invalid in litigation.  The was very close to the findings of a 1985 study finding 55% to be valid and a 1994 study finding 56% to be valid which were cited in the 1998 study.

About two-thirds were found to be invalid due to obviousness or prior art, and almost all of the remaining cases involved non-prior art grounds for invalidity under Section 102 of the statute governing patents.  Drug patents are particularly likely to be upheld, while software patents are particularly likely to be invalidated.

Juries are much more likely to hold that patents are valid than judges, although the removal of weak cases in pre-trial motions before juries consider patent validity partially accounts for the difference.

This study, of course, does not reflect recent case law weakening business method patents.

The results are quite surprising given the strong presumption of validity that is given to PTO approved patents.  But, the high invalidity rate could simply reflect the fact that patent infringement cases involving clearly valid patents almost never go to trial, while patent infringement cases where liability is at issue due to questions over the validity of the patent very often go to trial.

Incidentally, intellectual property is one of the hottest areas of academic legal research.  Of the top 50 law review articles in the last 25 years (by citation) on private law,  26 of them (a majority) involve intellectual property.

Intellectual property lawsuits make up a tiny share of all litigation, but the theoretical issues involves are important and we do deal with intellectual property issues (which are rapidly becoming muddy in the digital age) on a daily basis.

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