Patent Litigation Run Amok

Back in early October I looked at the Fortune 100 and looked at who got sued the most (Part 1, Part 1a, Part 2). To nobody's surprise, the companies in the high tech/telecom industry have been the most sued, especially by non-practicing entities. Well, the last three months haven't changed any of that. With patents valued at an all-time high and the threat of patent reform around the corner, the onslaught of cases -- especially in plaintiff-friendly jurisdictions like the Eastern District of Texas -- is unbelievable.

I decided to take my top 20 list from the end of September, and add the last three months' cases. Below is my revised list. For the hell of it, I added in Apple and Google. I actually did three lists: the number of patent cases filed against these companies since October 1, the total in 2006-2007, and the number of patent lawsuits by non-practicing entities in 2006-2007.

(Note that, of course, this does not include cases filed December 19-31, even though I did see a huge multi-defendant case today involving Google. Also, this does not include cases where companies' customers were sued - I have no idea who's indemnifying whom).

Before I give the list, my conclusions: patent litigation is out of control. Out of the top third of the companies in the Fortune 100 sued for patent infringement over the last two years (plus adding in Apple and Google), these 35 companies were sued 500 times in that two-year period! That's an average of over 14 times per company.

Out of those 500 lawsuits, you would expect roughly 60 in the last 3 months. But, in fact, there were almost double that number of lawsuits in the last 3 months aimed at those top 35 companies. Moreover, in the 21-month period from January 2006 through September 2007, cases filed by entites that don't make any products accounted for around 50% of the cases filed against those top 35 entities, which comprised companies in the High Tech, Financial, Retail, Automotive, Health Care, and Bio/Pharma sectors. Sure, some sectors (High Tech, Financial) had more NPEs than others, but the overall percentage was 50%.

But looking at the last 3 months, the percentage of NPE cases among these 35 leading American companies has shot from 50% up to nearly 70%. And if you look at the High Tech/Telecom and Financial sectors only over the last 3 months, a full 80% (63 out of 78) were cases brought by these non-practicing entities. (And note, I did not include individual inventors or universities in the "non-practicing entity" category, or else the numbers would have been even more shockingly higher)

(And what about Microsoft, being sued almost twice per month over the last two years? Every month. For two years!)

Without further adieu, here are the lists:


Defendants Sued The Most, October-December 2007 (through December 18)

1. Microsoft (12)
2t. Apple (7)
2t. HP (7)
4t. Cisco (6)
4t. Google (6)
4t. Wal-Mart (6)
7t. AT&T (5)
7t. Dell (5)
7t. Motorola (5)
10t. Intel (4)
10t. Johnson & Johnson (4)
10t. Sprint Nextel (4)
10t. Target (4)


Defendants Sued The Most, 2006-2007 (through December 18)

1. Microsoft (43)
2. Verizon (29)
3t. Target (28)
3t. Dell (28)
5t. Wal-Mart (24)
5t. HP (24)
7. Apple (23)
8t. Motorola (20)
8t. Sprint Nextel (20)
10. AT&T (19)
11. Johnson & Johnson (18)
12t. GE (16)
12t. Google (16)
14t. General Motors (15)
14t. IBM (15)
16. Cisco (14)
17. Sears (12)
18t. Best Buy (11)
18t. Time Warner (11)
20t. Comcast (10)
20t. Lowe's (10)
20t. Honeywell (10)
23. Walgreen (9)
24. Intel (8)

7 patent lawsuits
Bank of America
Costco
FedEx
Procter & Gamble

6 patent lawsuits
CVS/Caremark
Ford
Home Depot
McKesson

5 patent lawsuits
3M
Federated Department Stores
Merck


Defendants Sued The Most By Non-Practicing Entities, 2006-2007

1. Microsoft (23)
2. Verizon (22)
3. Sprint/Nextel (19)
4. Dell (18)
5. Motorola (17)
6. AT&T (16)
7t. Apple (15)
7t. HP (15)
9t. Cisco (13)
9t. Google (13)
11. Time Warner (11)
12. General Motors (10)
13t. Comcast (9)
13t. IBM (9)
15t. Bank of America (7)
15t. FedEx (7)
15t. Wal-Mart (7)
18. Best Buy (6)
19t. General Electric (5)
19t. Intel (5)