Now that now we have crossed the midway level of 2025, it’s nearly as good a time as any to check out the numbers underlying fashionable patent litigation. Making this train extra well timed and helpful is the latest floating by Trump administration officers of a “patent tax” to interchange the present upkeep charge system. Beneath the (admittedly sketchy at greatest) particulars of that proposal, patent holders would pay between 1%-5% of patent worth as a tax — instantly elevating the query of how patent valuation can be dealt with beneath the proposed new scheme. Whereas we will speculate as as to whether this trial balloon will float towards a profitable implementation or get popped earlier than actually chickening out, we do have concrete knowledge as to how patent house owners can use the litigation course of to generate worth from their infringed patents. That knowledge, out there in Lex Machina’s Harm Awards Litigation Report 2025, helps us higher perceive simply what sort of outcomes one can anticipate from profitable patent assertion.
As with my prior takes on different Lex Machina studies, what follows are three idiosyncratic takeaways based mostly on my overview of their latest launch. First, the report’s context on the “dramatic progress” of patent litigation awards relative to different areas of litigation deserves additional consideration. Second, the continued rise in each the common and median jury award in patent circumstances is fairly wild. Third, the sharp decline in damages awarded in circumstances earlier than the WDTX’s Choose Albright, in addition to the dominance of SDNY judges on the prime of the “Whole Damages Awarded” chart, gives an fascinating denouement to what appeared an unstoppable Waco-based patent prepare just some years in the past.
To begin, I commend a full learn of the report’s “Govt Abstract,” with its dialogue of the interaction between the litigation and insurance coverage industries as framed by the present debate round “social inflation.” In an setting the place across-the-board damages awards are growing, disagreements as to the reason for that progress are sure to happen. For insurers, “social inflation” is the bogeyman, because it has “resulted in speedy will increase in declare prices for key legal responsibility insurance coverage strains.” Likewise, defendants in patent circumstances and their allies have raised the alarm for years concerning the unwell results engendered by the introduction of third-party litigation funding into the patent litigation combine. In that vein, because the report notes, litigation funding and complex plaintiff persuasion ways “could have lately allowed harm awards to flourish” at a price exceeding even that of inflation.
But, the report suggests warning is warranted by way of assuming that there’s a “clear reply about whether or not and to what extent ‘social inflation’ applies throughout numerous kinds of civil litigation.” Undergirding that recommended warning is the truth that “[p]ractice areas differ wildly by way of altering values of injury awards from 2015-2024.” So though “patent infringement and commerce secrets and techniques, have skilled dramatic progress” by way of damages awarded, different areas of legislation have seen much less motion, with decreases “in each quantity and worth.” Additional, the report means that the present interval of usually rising damages awards might be “a traditional fluctuation not in and of itself adequate proof of adjusting societal norms about lawsuits.” In brief the proverbial jury is out, with the one assurance that the talk will proceed to rage.
Second, the report’s insights into the “dramatic progress” in patent damages awards are worthy of additional investigation. Maybe the largest driver of that progress is the growing willingness of juries, particularly post-Covid, to award giant damages to patent house owners which might be capable of shepherd their circumstances to trial and verdict. As an example this progress, let’s check out just a few numbers disclosed within the report. Previous to 2020, 2017 was the yr that noticed essentially the most patent circumstances get to a jury verdict, with 34 such verdicts. In 2023 and 2024, nevertheless, the variety of circumstances the place a jury awarded damages leapt as much as 50 every year, which signifies that we’re getting a minimum of another patent case a month going to trial efficiently for plaintiffs, than we did in the most effective yr for such outcomes pre-Covid.
Likewise, previous to Covid, 2018 was the yr with the very best common jury award for patentees, to the tune of a bit over $32 million. Since trials resumed in 2020? We’ve got not seen a yr the place the common jury verdict was lower than near $39 million — and the numbers for 2022-2024 are staggering, with common jury awards at $74 million, $58 million, and $83 million respectively. Dramatic progress certainly, with extra circumstances attending to verdict and juries awarding ever-higher verdict quantities as nicely. Whereas it appears clear that the demanding requirements of each contingency legislation corporations and third-party litigation funders could also be contributing to raised case choice and extra endurance for patent plaintiffs, it additionally looks like patent trial attorneys and their damages consultants are doing a greater job than ever getting juries to reward patent house owners at trial. All these results are linked, a minimum of to some extent, as a result of one of many methods a patent case turns into engaging to contingency attorneys and funders is the place the damages potential is sky excessive, resulting in extra circumstances going to trial in opposition to giant defendants, whose revenues from gross sales of infringing merchandise contribute to giant damages awards. And so the circle continues to show ad infinitum, topic after all to the Federal Circuit’s wielding of its mega horsepower damages award weed whacker, which it’s not shy about doing.
Lastly, it’s a humbling reminder for the patent bar that whereas we could deal with giant circumstances, with regards to producing headline-worthy verdicts, big-ticket class motion circumstances proceed to generate the most important damages awards. With an actual focus of the largest such circumstances within the Southern District of New York, it’s no shock to see SDNY judges on the prime of the charts by way of damages awards from 2022-2024 nationwide. The one “patent decide” within the prime 10, WDTX’s Choose Alan Albright, really noticed an enormous decline in damages awarded yr over yr from 2022-2024. After a high-water mark of $1.44 billion in 2022, 2024 noticed solely $318 million in damages awarded in his court docket, which is a big quantity. However that quantity is extra comparable these days to a single wholesome EDTX patent verdict, fairly than proof that WDTX juries are tremendous prepared to reward patentees at trial. It is going to be fascinating to see if the WDTX can hold tempo with EDTX going ahead on this entrance, or if the decline in jury awards will cement EDTX’s “prime spot because the main venue for patent litigation in the US.”
In the end, we as soon as once more can see from the report’s presentation of knowledge that fashionable patent litigation stays a vibrant and difficult pursuit for each plaintiffs and defendants. On the similar time, the continued adjustments within the patent house, each carried out and being proposed, promise to make the upcoming years much more thrilling — and if the quantity of damages awarded in patent circumstances continues to extend, much more profitable for profitable litigants, their counsel, and the litigation funders that had been lucky sufficient to have backed the winners. I’m certain that many on this readership really feel the identical manner. Thanks as soon as once more to Lex Machina for pulling collectively and presenting the information in a manner that highlights how nicely our little space of legislation continues to adapt and develop.
Please be happy to ship feedback or inquiries to me at [email protected] or through Twitter: @gkroub. Any matter ideas or ideas are most welcome.
Gaston Kroub lives in Brooklyn and is a founding associate of Kroub, Silbersher & Kolmykov PLLC, an mental property litigation boutique, and Markman Advisors LLC, a number one consultancy on patent points for the funding neighborhood. Gaston’s follow focuses on mental property litigation and associated counseling, with a powerful deal with patent issues. You possibly can attain him at [email protected] or comply with him on Twitter: @gkroub.
