An Empirical Examination of the Adjudication and Settlement of Patent Infringement Lawsuits in the United States Court of Federal Claims

Abstract

This study examined and analyzed data on how often patent lawsuits settle or are adjudicated on the merits against the U.S. Government at the Court of Claims in comparison to lawsuits against non-governmental defendants in the Eastern District of Texas and the E.D. Virginia. The comparative analysis focused on three years of study at these courts and was based on the gathered data on how often plaintiffs received a favorable outcome; how often parties settled; how often plaintiffs received a verdict on the merits from a court; how often defendants won on summary judgment; how often defendants won at trial; and how many cases were pending resolution. The findings revealed that the rates of settlement, adjudication, and the other data are highly venue dependent. In cases where the U.S. Government is a defendant, it received a greater percentage of favored outcomes through adjudication, summary judgment, and dismissed cases at the Court of Claims in comparison to the non-governmental defendants in the other courts studied. In addition, the overall rates of settlement are lower and the rate of adjudication is higher than reported in the previous studies. This study yielded findings indicating that the U.S. Government may receive more favorable treatment in patent cases, as it has financial and strategic advantages in comparison to other defendants. In addition to significant financial resources, the U.S. Government defends itself in the same court for all patent lawsuits in which it is a named defendant. This gives the U.S. Government strategic advantages, such as predictable court rules, local and consistent rules of procedure, familiarity with the docket and length of time to trial, and an ability to frequently communicate and practice before a handful of judges. In order to provide non-governmental defendants with similar advantages, this thesis proposes that Congress mandate that all patent infringement lawsuits undergo an Inter Partes Review at the U.S. Patent & Trademark Office so that the Patent & Trademark Office can initially determine the validity of a patent at issue before a District Court examines the remaining issues. This bifurcated trail system would result in significantly lower litigation costs to non-governmental defendants, predictable court rules at the Patent & Trademark Office, consistent rules of procedure, familiarity with a docket, a limited amount of time to reach a decision, and the ability to frequently communicate and practice before known judges that are subject matter experts. Thus, this type of system may, provide all defendants with similar strategic advantages, predictable initial trial costs, more consistent and predictable outcomes and may reduce forum shopping.