Like us on Facebook - Andrews Kurth LLP

since 1902

Straight Talk® is good business
Image of several flags

collaborative

Follow us on Twitter @andrewskurthllp

Patents by the Numbers

David P. Griffith
IP and Technology Developments - July 2011

July 21, 2011

Numbers help us think, and they help express what has happened and what will likely happen. It is often difficult to find a number when you are looking for it. Patent infringement cases are no different. Despite Mark Twain’s warning about the three kinds of lies—lies, damn lies and statistics—here are answers to questions that you might find useful when you do not have enough information to otherwise answer them:

Patent Prosecution

How long does it take to get the first office action from the Patent Office?

26 months - USPTO statistic as of April 2011

How long does it take to get a patent issued?

34 months - USPTO statistic as of April 2011

This includes patents that were abandoned, so the average of just cases prosecuted to conclusion would likely be longer.

What are the chances that a (utility) patent application will result in a patent?

46% - USPTO statistic as of April 2011

For comparison, the USPTO granted 219,614 utility patent applications in 2010. There were 456,106 utility patent applications filed in 2009, which is about the same number in 2008 (456,321) and 2007 (456,154). So 48% would be the estimate from this data. 

Patent Reexaminations

What are the chances the PTO will grant an ex parte reexamination?

ex parte: 92%
inter partes: 95%

USPTO statistics as of March 2011

How much will an ex parte reexamination cost?

$10,000 - median from AIPLA 2009 Report

How long will an ex parte reexamination take?

26 months - USPTO mean (average) as of March 2011
20 months  - USPTO median as of March 2011

What are the odds in an ex parte reexamination?

All claims confirmed: 24%  
All claims cancelled: 13%   
Claims modified: 63%

USPTO statistics as of March 2011 for third-party-requested reexams

How much will an inter partes reexamination cost?

$188,000 - median from AIPLA 2009 Report

How long will an inter partes reexamination take?

37 months - USPTO mean (average) as of March 2011
33 months - USPTO median as of March 2011

What are the odds in an inter partes reexamination?

All claims confirmed: 12%   
All claims cancelled: 45%   
Claims modified: 43%

USPTO statistics as of March 2011

Patent Infringement Cases

What are the odds of a patentee winning his infringement case?

38% - Overall: This is the % for 15 most active patent dockets (1995-2009) as reported by PwC. PwC reported the success rates for 1995-2009 generally in two numbers as reflected below. Weighting those numbers yields the same overall percentage (38%).
31% - Non-practicing entity: success rates for 1995-2009 as reported by PwC
40% - Practicing entity: success rates for 1995-2009 as reported by PwC

What are the odds of a patentee winning if he gets to a jury?

75% - Jury win rate for patentees who survive SJM and get to a jury, reported by UofH’s patstats.

How much will the patent infringement case cost to defend?

If less than $1 million at risk - $650,000   
If $1-25 million at risk - $2,500,000   
If $25 million+ at risk - $5,500,000  

Medians from AIPLA 2009 Report 

How long will the patent infringement case take to get to trial?

2.5 years - Median from PwC for 2009

What is the royalty rate a patent receives through litigation?

8% - Median as reported by Navigant Consulting using USPQ- and Lexis-reported decisions (1982-2009)

If the patentee wins his infringement case, how much will he get?

$2.8 million - Median award (2000-2009) as reported by Navigant Consulting using USPQ- and Lexis-reported decisions
$5.2 million - Median of 15 most active patent dockets reported by PwC for 1995-2009
$6 million - Median verdict for winning patentees reported by UofH’s patstats covering over a decade of reported cases
$10.5 million - Median award for 2009 reported by PwC
$17.8 million - Mean (average) award (2000-2009) as reported by Navigant Consulting using USPQ- and Lexis-reported decisions

Note that, even for the same dataset (the first and last numbers above), the median (the middle value) and the mean (the average of all values) differ greatly. This is because of the extremely large values for the largest awards: the top 3% of the awards account for nearly 45% of the total (Navigant). So the “average” patent damage award will have a distribution like this:

5% - chance of an award of more than $100 million   
27% - chance of an award of $10-100 million   
33% - chance of an award of $1-10 million   
36% - chance of an award of less than $1 million   

2000-2009 awards as reported by Navigant Consulting using USPQ- and Lexis-reported decisions

Another way to account for variability but express the middle is to use the middle 50% (the first quartile to third quartile):

$0.7 million to $27 million - The 2008 distribution of awards using the PwC 2008 database as reported by Mazzeo, et al.

All things considered (chances of winning and damages), what’s a patent worth at trial?

<$2 million - Median award of all cases that go through trial (2005-2009) in UofH study as reported by PLI

If appealed, how long will that take?

11 months - Median from docketing to disposition after hearing or submission of district court cases as reported by the Federal Circuit for 2010


For more information, please email IPandTech@andrewskurth.com.


Other articles from this issue of IP and Technology Developments.


Download a PDF of the entire issue.


Click here to subscribe to future Andrews Kurth alerts.

Associated Practices