Now that we now have crossed the midway level of 2025, it’s nearly as good a time as any to try the numbers underlying trendy patent litigation. Making this train extra well timed and helpful is the current floating by Trump administration officers of a “patent tax” to exchange the present upkeep payment 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 could be dealt with below 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 retreating, we do have concrete information as to how patent homeowners can use the litigation course of to generate worth from their infringed patents. That information, accessible in Lex Machina’s Damage Awards Litigation Report 2025, helps us higher perceive simply what sort of outcomes one can count on from profitable patent assertion.
As with my prior takes on different Lex Machina stories, what follows are three idiosyncratic takeaways primarily based on my evaluation of their latest launch. First, the report’s context on the “dramatic development” of patent litigation awards relative to different areas of litigation deserves additional consideration. Second, the continued rise in each the typical and median jury award in patent instances is fairly wild. Third, the sharp decline in damages awarded in instances earlier than the WDTX’s Choose Albright, in addition to the dominance of SDNY judges on the high of the “Complete Damages Awarded” chart, gives an fascinating denouement to what appeared an unstoppable Waco-based patent practice only a few years in the past.
To start out, 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 surroundings the place across-the-board damages awards are rising, disagreements as to the reason for that development 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 traces.” Likewise, defendants in patent instances 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 techniques “might have not too long ago allowed injury awards to flourish” at a charge exceeding even that of inflation.
But, the report suggests warning is warranted when it comes to assuming that there’s a “clear reply about whether or not and to what extent ‘social inflation’ applies throughout varied forms of civil litigation.” Undergirding that urged warning is the truth that “[p]ractice areas differ wildly when it comes to altering values of injury awards from 2015-2024.” So although “patent infringement and commerce secrets and techniques, have skilled dramatic development” when it comes to damages awarded, different areas of regulation 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 may very well be “a standard fluctuation not in and of itself adequate proof of fixing societal norms about lawsuits.” Briefly the proverbial jury is out, with the one assurance that the talk will proceed to rage.
Second, the report’s insights into the “dramatic development” in patent damages awards are worthy of additional investigation. Maybe the largest driver of that development is the rising willingness of juries, particularly post-Covid, to award giant damages to patent homeowners which can be capable of shepherd their instances to trial and verdict. As an example this development, let’s check out just a few numbers disclosed within the report. Previous to 2020, 2017 was the yr that noticed probably the most patent instances get to a jury verdict, with 34 such verdicts. In 2023 and 2024, nonetheless, the variety of instances the place a jury awarded damages leapt as much as 50 annually, which implies that we’re getting a minimum of another patent case a month going to trial efficiently for plaintiffs, than we did in the perfect yr for such outcomes pre-Covid.
Likewise, previous to Covid, 2018 was the yr with the 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 typical 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 development certainly, with extra instances attending to verdict and juries awarding ever-higher verdict quantities as effectively. Whereas it appears clear that the demanding requirements of each contingency regulation companies 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 legal professionals and their damages consultants are doing a greater job than ever getting juries to reward patent homeowners 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 legal professionals and funders is the place the damages potential is sky excessive, resulting in extra instances 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 endlessly, topic in fact to the Federal Circuit’s wielding of its mega horsepower damages award weed whacker, which it isn’t shy about doing.
Lastly, it’s a humbling reminder for the patent bar that whereas we might deal with giant instances, on the subject of producing headline-worthy verdicts, big-ticket class motion instances proceed to generate the most important damages awards. With an actual focus of the largest such instances within the Southern District of New York, it’s no shock to see SDNY judges on the high of the charts when it comes to damages awards from 2022-2024 nationwide. The one “patent decide” within the high 10, WDTX’s Choose Alan Albright, truly noticed a giant 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 courtroom, which is a big quantity. However that quantity is extra comparable these days to a single wholesome EDTX patent verdict, slightly 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 preserve tempo with EDTX going ahead on this entrance, or if the decline in jury awards will cement EDTX’s “high spot because the main venue for patent litigation in the USA.”
In the end, we as soon as once more can see from the report’s presentation of knowledge that trendy patent litigation stays a vibrant and difficult pursuit for each plaintiffs and defendants. On the similar time, the continued adjustments within the patent area, each carried out and being proposed, promise to make the upcoming years much more thrilling — and if the quantity of damages awarded in patent instances continues to extend, much more profitable for profitable litigants, their counsel, and the litigation funders that have been lucky sufficient to have backed the winners. I’m certain that many on this readership really feel the identical method. Thanks as soon as once more to Lex Machina for pulling collectively and presenting the information in a method that highlights how effectively our little space of regulation continues to adapt and develop.
Please be happy to ship feedback or inquiries to me at [email protected] or through Twitter: @gkroub. Any matter strategies or ideas are most welcome.
Gaston Kroub lives in Brooklyn and is a founding companion 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 observe focuses on mental property litigation and associated counseling, with a powerful concentrate on patent issues. You may attain him at [email protected] or observe him on Twitter: @gkroub.
