Non-practicing entities filed fewer cases in the first half of 2010 compared to same period last year, but they targeted more defendants per suit, according to RPX (Rational Patent), a defensive patent aggregator that buys patents to keep them out of litigation for its corporate clients.
RPX vice president and head of acquisitions, Keven Barhydt, presented the figures Monday in San Francisco during a two-day seminar on patent litigation sponsored by the Practising Law Institute.
“It’s very clear that money continues to flow to non-practicing entities,” Barhydt told a room of several dozen patent attorneys.
According to RPX, in the first six months of 2010, NPEs filed 283 cases, down from 342 in the same period last year. But they named an average of eight defendants per case in 2010, up from five per case in 2009.
Several factors are fueling the trend, Barhydt said. NPEs are seeing solid returns on their investments with relatively low upfront costs. There’s also a significant supply of assets on the open market.
But NPE’s are also getting more sophisticated at signing on individual inventors. They’re more apt to play on the emotions of inventors who might feel they were cheated or misused by a big corporation. And NPEs are telling inventors that they’ll make a lot of money from the licensing that could result from litigation. “That’s the model that’s working quite well for them,” Barhydt said.