2014
`NPE Litigation Report
`
`

`
`Summary of Findings
`
`The RPX NPE Litigation Report presents a comprehensive
`overview of the litigation activities of non-practicing
`entities (NPEs) in 2014. This report builds on those of
`previous years, continuing to provide transparency
`through the data needed to inform sound decisions
`concerning NPE litigation.
`
`For example, this year’s data reveal a marked decrease in NPE litigation from 2013
`to 2014. While that drop is noteworthy, a deeper dive into the data within this report
`gives ample reason to be cautious before declaring that drop indicative of a trend,
`much less the beginning of the end of NPE litigation.
`
`NPEs Remain the Largest Drivers of Patent Litigation
`The volume of NPE litigation fell in 2014 for the first time in four years. That drop in the
`overall numbers is unmistakable. Nevertheless, cases filed by NPEs remained the
`most common form of patent litigation in 2014; NPEs continued to find new companies
`to target for patent infringement; and the frequency with which NPEs filed cases
`against smaller companies (by revenue) and private companies has remained
`remarkably steady over time.
`
`RPX Corporation
`
`2014 NPE Litigation Report | Summary of Findings
`
`2
`
`

`
`The number of cases filed by NPEs dropped from around 3,700 in 2013 to roughly
`2,800, but the total volume of patent cases also fell over the same time period, from
`I updated the color theme, the two blues are now correct.
`5,500 in 2013 to about 4,500 this past year. And, of those roughly 4,500 patent
`
`cases filed in 2014, NPEs filed 2,791—63% of the total—while operating companies
`Change of plan on color scheme… I didn’t like the Dark Blue / Blue combo
`“NPE Cases” remains Dk Blue as planned
`filed only 1,667. NPEs were also responsible for naming 56% of all defendants to
`“Operating Company Cases” is now Dk Blue, with 50% transparency
`patent litigations in 2014, adding 3,600 defendants where plaintiff operating
`
`companies added only about 2,900 defendants.
`Will make notes in this doc when color differs from my notes in the print out.
`
`For Intro chart, INDD page 3
`NPEs Found New Targets in 2014
`NPEs continued to broaden their reach this past year, targeting new companies in patent
`infringement litigation. In 2014, nearly 1,100 companies were first-time defendants
`in an NPE case, and when duplicates are removed from the list of defendants to any
`patent infringement case, 2014 saw about 3,800 unique defendants added. More
`than half of that list (2,072 unique defendants) were added by NPEs.
`
`NPEs Continued Targeting Smaller Companies in 2014
`Large companies (by revenue) and public companies have a higher rate of NPE
`To “Format Data Series” for line chart:
`litigation than do smaller and private companies. However, 62% of unique defendants
`Style: Circle / Size: 7
`Line: Black set to 40% transparency / Weight: 1 pt
`in 2014 had less than $100M in annual revenue, and the frequency of NPE litigation
`
`against smaller companies has remained remarkably steady over the past five years.
`To “Format Data Labels”
`Labels: Label Position Above
`Indeed, the data demonstrates that the only appreciable drop in NPE litigation
`I showed you the font trick yesterday
`frequency has occurred for companies with between $10B and $50B in annual
`Chart 46: NPE Cases per Unique Defendant by Company Revenue
`revenue. Likewise, while the frequency of NPE litigation against public companies
`has fluctuated from year to year, the frequency of such suits against private
`companies has remained the same for the past five years. Also, private companies
`made up nearly three-fourths of unique defendants in NPE cases in 2014.
`
`Cases Filed
`
`Chart 1: Cases Filed
`
`NPE Cases per Unique Defendant by Company Revenue
`
`9.6
`Chart 2: NPE Cases Filed as Percentage of All Patent Infringement
`Cases Filed
`
`5,518
`
`1,845
`
`4,721
`
`1,662
`
`3,059
`
`3,673
`
`4,458
`
`1,667
`
`2,791
`
`31%
`
`3,315
`
`1,760
`
`1,555
`
`8.2
`
`47%
`4.0
`
`2.1
`
`1.4
`
`1.1
`
`7.3
`
`67%
`
`65%
`
`4.9
`
`2.6
`
`1.6
`
`1.1
`
`4.0
`
`2.2
`
`1.5
`
`1.2
`
`7.6
`
`63%
`
`4.2
`
`2.1
`
`1.5
`
`1.1
`
`9.8
`
`3.2
`
`2.1
`
`1.4
`
`1.2
`
`2,491
`
`1,731
`
`760
`
`2010
`2010
`
`2012
`2011
`2012
`2011
`Operating Company Cases
`
`2013
`2013
`NPE Cases
`
`2014
`2014
`
`2010
`
`2010
`2011
`2010  
`<$100M  
`> $50B
`
`2011
`2012
`2011  
`$100M-­‐1B  
` $10B–50B
`
`2012
`2013
`2012  
`$1B-­‐10B  
` $1B–10B
`
`2013
`2014
`2013  
`$10B-­‐50B  
`$100M–1B
`
`2014
`2014  
`>$50B  
`< $100M
`
`Operating Company Cases
`NPE Cases
` 2014 NPE Litigation Report 5
`Methodology Notes: Revenue is based on data from third party providers and is for annual results available at time of report (typically 2013 results). Determination of ownership
`RPX Corporation
`type is also based on data from third party providers. Ownership type may change across time as companies switch from private to public and vice versa.
`RPX Corporation
`2014 NPE Litigation Report | Summary of Findings
`
`3
`
`RPX Corporation
`
` 2014 NPE Litigation Report 3
`
`

`
`Other Noteworthy Trends and Constants
`
`PTAB
` 
`The popularity of validity challenges before the Patent Trial and Appeal Board (PTAB)
`continues to grow. Petitions for inter partes review (IPR) against NPEs grew over
`150% from 2013 to 2014 and covered business method (CBM) review against NPEs
`increased more than 80% over the same time period.
`
`Venues
`The Eastern District of Texas and the District of Delaware remain the most popular
`venues for NPE plaintiffs. The two venues accounted for 70% of cases filed and 66%
`of total defendants added.
`
`Software, Mobile
`NPEs continue to favor software and mobile device patents. Patents asserted by
`NPEs in 2014 most often had US Patent Classification (USPC) codes related to
`software and mobile devices. The top five class codes accounted for 31% of unique
`patents asserted.
`
` 
`
`Acacia
`Acacia remains the most litigious NPE. The top ten NPEs in 2014 accounted
`for 28% of NPE cases filed and 28% of total NPE defendants added. Acacia led
`the pack in both the number of cases filed and total defendants added in 2014.
`Acacia was also the top NPE by NPE cases filed and total NPE defendants added
`over the past five years.
`
`Venue
`
`
`
`Chart 35: NPE Cases Filed in 2014 by District Court
`NPE Cases Filed in 2014 by District Court
`
`
`
`
`
`
`Texas Eastern
`Texas Eastern
`
`Delaware
`Delaware
`
`California Central
`California Central
`
`California Northern
`California Northern
`
`
`New Jersey
`New Jersey
`
`Illinois Northern
`Illinois Northern
`
`Florida Middle
`Florida Middle
`
`Florida Southern
`Florida Southern
`
`Virginia Eastern
`Virginia Eastern
`
`All Others
`All Others
`
`
`
`
`
`
`
`
`48%
`48% (1,352)
`(1,352)
`
`22%
`22% (613)
`(613)
`
`3%
`3% (87)
`(87)
`3%
`3% (83)
`(83)
`3%
`3% (80)
`(80)
`2%
`2% (59)
`(59)
`2%
`2% (54)
`(54)
`2%
`2% (49)
`(49)
`2%
`2% (46)
`(46)
`
`13%
`13% (368)
`(368)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` 
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`The complete 2014 NPE Litigation Report can be found at http://www.rpxcorp.com/
`key-patent-market-trends/reports/.
`
`For further information, e-mail reports@rpxcorp.com
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Chart 36: Total NPE Defendants Added in 2014 by District Court
`
`Texas Eastern
`
`Delaware
`
`California Central
`
`Florida Middle
`
`New Jersey
`
`California Northern
`
`Florida Southern
`
`Illinois Northern
`
`Virginia Eastern
`
`All Others
`
`4% (152)
`
`4% (133)
`
`3% (114)
`
`3% (92)
`
`2% (78)
`
`2% (77)
`
`2% (72)
`
`47% (1,715)
`
`19% (674)
`
`14% (518)
`
`4
`
` 2014 NPE Litigation Report 19
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`Per printout
`
`

`
`Table of Contents
`
`Litigation Volume
`
`Patent Validity Challenges
`
`Venue
`
`Sector and Revenue Analysis
`
`Top Plaintiffs and Defendants
`
`Patent Details
`
`Methodology
`
`About RPX
`
`6
`
`14
`
`21
`
`25
`
`29
`
`32
`
`38
`
`41
`
`2014 NPE Litigation Report | Table of Contents
`
`5
`
`RPX Corporation
`
`

`
`Litigation Volume
`
`To “Format Data Series” for line chart:
`I updated the color theme, the two blues are now correct.
`Style: Circle / Size: 7
`
`Line: Black set to 40% transparency / Weight: 1 pt
`Change of plan on color scheme… I didn’t like the Dark Blue / Blue combo
`
`To “Format Data Series” for line chart:
`“NPE Cases” remains Dk Blue as planned
`I updated the color theme, the two blues are now correct.
`To “Format Data Labels”
`Style: Circle / Size: 7
`“Operating Company Cases” is now Dk Blue, with 50% transparency
`
`Line: Black set to 40% transparency / Weight: 1 pt
`Labels: Label Position Above
`Change of plan on color scheme… I didn’t like the Dark Blue / Blue combo
`
`
`I showed you the font trick yesterday
`“NPE Cases” remains Dk Blue as planned
`Will make notes in this doc when color differs from my notes in the print out.
`To “Format Data Labels”
`“Operating Company Cases” is now Dk Blue, with 50% transparency
`Labels: Label Position Above
`
`I showed you the font trick yesterday
`Will make notes in this doc when color differs from my notes in the print out.
`Key 2014 Findings
`
`NPEs Still on Top
`
`• NPE litigation remained the most common form of patent litigation. NPE cases
`accounted for 63% of all such cases, and NPE defendants were 56% of all patent
`infringement defendants. See Charts 1, 2, 3, and 4.
`• Overall 3,768 unique defendants were added to patent infringement cases in 2014.
`Of these, 2,072 unique defendants were added to NPE cases. See Charts 5 and 6.
`• Although the number of new NPE campaigns dropped 10% from 2013 to 2014,
`Chart 1: Cases Filed
`total NPE campaign defendants made up the majority of campaign defendants for
`the fifth straight year. See Charts 7, 8, 9, and 10.
`
`PAE Domination
`Inventors, non–competing entities, and universities together accounted for only 11% of
`NPE cases filed in 2014 (9% in 2013) and 14% of total NPE defendants added (13% in
`2013). Patent assertion entities accounted for the rest. See Charts 17 and 18.
`
`One-year Average
`Most NPE cases that ended in 2014 did so within six months of filing. 35% of cases
`lasted more than a year. On average, NPE cases that ended in 2014 lasted 12 months.
`Chart 2: NPE Cases Filed as Percentage of All Patent Infringement
`Cases Filed
`See Chart 13.
`
`
`
`Chart 1: Cases Filed
`
`Operating Company Cases
`NPE Cases
`
`2,491
`
`1,731
`
`760
`2010
`2010
`
`3,315
`
`1,760
`
`1,555
`
`2011
`2011
`
`5,518
`
`1,845
`
`3,673
`
`4,721
`
`1,662
`
`3,059
`
`2012
`2012
`
`2013
`2013
`
`100%
`90%
`80%
`70%
`60%
`31%
`50%
`40%
`30%
`20%
`10%
`0%
`2010
`
`4,458
`
`1,667
`
`2,791
`
`2014
`2014
`
`NPE Cases
`
`Operating Company Cases
`
`RPX Corporation
`
`Chart 2: NPE Cases Filed as Percentage of All Patent Infringement
`New to the Scene
`Cases Filed
`143 new NPEs filed suit for the first time in 2014, as in 2013. See Chart 19.
`
`65%
`63%
`Chart 2: NPE Cases Filed as Percentage of All Patent Infringement Cases Filed
`
`67%
`
`47%
`
`31%
`
`47%
`
`65%
`
`67%
`
`63%
`
`2010
`2011
`2010
`
`2011
`2012
`2011
`
`2012
`2013
`2012
`
`2013
`2014
`2013
`
`2014
`2014
`
`2014 NPE Litigation Report | Litigation Volume
` 2014 NPE Litigation Report 5
`
`6
`
`RPX Corporation
`
`

`
`Litigation Trends
`Chart 3: Total Defendants Added in Cases
`Chart 3: Total Defendants Added in Cases
`Li#ga#on  Trends  
`8,364
`Chart 3: Total Defendants Added in Cases
`Chart 3: Total Defendants Added in Cases
`Li#ga#on  Trends  
`Li#ga#on  Trends  
`7,543
`7,074
`8,364
`8,364
`3,145
`
`7,928
`
`7,543
`3,380
`
`7,543
`
`7,074
`2,813
`
`3,145
`
`3,145
`
`6,482
`
`7,928
`
`7,928
`3,004
`7,074
`
`3,004
`
`3,004
`
`6,482
`2,857
`
`3,380
`
`3,380
`
`2,813
`
`2,813
`
`5,219
`
`4,163
`
`5,219
`
`5,219
`
`4,163
`
`2011
`2011
`
`4,261
`
`4,261
`2012
`2012
`
`4,924
`
`4,924
`
`4,924
`
`4,261
`
`2013
`2013
`
`2,857
`
`3,625
`
`3,625
`2014
`2014
`
`Chart 4: Total NPE Defendants Added as Percentage of
`Total Patent Infringement Defendants Added
`Chart 4: Total NPE Defendants Added as Percentage of Total Patent
`Infringement Defendants Added
`
`Chart 4: Total NPE Defendants Added as Percentage of Total Patent
`Infringement Defendants Added
`100%
`Chart 4: Total NPE Defendants Added as Percentage of Total Patent
`Chart 4: Total NPE Defendants Added as Percentage of Total Patent
`90%
`Infringement Defendants Added
`Infringement Defendants Added
`80%
`6,482
`62%
`70%
`60%
`2,857
`50%
`40%
`55%
`30%
`20%
`55%
`10%
`3,625
`0%
`2010
`
`2010
`2010
`
`2011
`
`2011
`2011
`
`2012
`
`2012
`2012
`
`2013
`
`2013
`2013
`
`2014
`
`2014
`2014
`
`56%
`
`56%
`
`62%
`
`60%
`
`62%
`
`60%
`
`62%
`
`56%
`
`62%
`
`62%
`
`62%
`
`62%
`
`60%
`
`60%
`
`56%
`
`55%
`
`55%
`
`4,163
`2010
`2010
`
`Total Defendants Added in Operating Company Cases
`Total Defendants Added in NPE Cases
`2010
`2011
`2012
`2010
`2011
`2012
`Chart 5: Unique Defendants Added in Cases
`
`2013
`
`2013
`
`2014
`
`2014
`
`2010
`2011
`2010
`2011
`2012
`Chart 6: First Time Defendants
`
`2012
`
`2013
`
`2013
`
`2014
`
`2014
`
`Chart 5: Unique Defendants Added in Cases
`Chart 5: Unique Defendants Added in Cases
`Chart 5: Unique Defendants Added in Cases
`Note: Unique counts are not additive.
`
`Chart 6: First-Time Defendants
`Chart 6: First Time Defendants
`Chart 6: First Time Defendants
`Note: Unique counts are not additive.
`
`Total: 5,036
`
`Total: 5,032
`
`Total: 4,393
`
`Total: 4,694
`
`Total: 3,768
`
`Total: 3,566
`
`Total: 3,386
`
`Total: 2,699
`
`Total: 2,817
`
`Total: 2,138
`
`2,552
`
`2,728
`
`2,871
`
`2,426
`
`2,434
`
`2,185
`
`2,702
`
`2,285
`
`2,072
`
`1,902
`
`2,104
`
`1,756
`
`1,887
`
`1,785
`
`2,552
`
`2,871
`2,871
`2,728
`2,728
`2,702
`2,702
`2,552
`2,426
`2,426
`2,434
`2,434
`2,285
`2,285
`2,185
`2,185
`2,072
`2,072
`1,902
`2014
`2013
`2012
`2011
`Unique Defendants added in NPE Cases
`
`2010
`
`1,458
`
`1,543
`
`1,568
`
`1,614
`
`1,291
`
`1,082
`
`1,756
`1,902
`2010
`
`2,104
`2,104
`1,887
`1,887
`1,785
`1,785
`1,756
`1,614
`1,614
`1,543
`1,543
`1,568
`1,568
`1,458
`1,458
`1,291
`2013
`2012
`2011
`2014
`1,082
`1,082
`First Time Defendants in NPE Cases
`
`1,291
`
`2010
`2010
`
`RPX Corporation
`
`2013
`2012
`2011
`RPX Corporation
`2013
`2010
`2011
`2012
`2013
`2012
`2011
`Unique Defendants added in NPE Cases
`Unique Defendants added in NPE Cases
`Unique Defendants Added in NPE Cases
`Unique Defendants Added in Operating Company Cases
`
`2014
`2014
`
`2014
`
`2010
`
` 2014 NPE Litigation Report 2
`2013
`2010
`2011
`2012
`2014
`2011
`2013
`2012
`2010
`2014
`2014
`2013
`2012
`2011
`First Time Defendants in NPE Cases
`First Time Defendants in NPE Cases
`First-Time Defendants in NPE Cases
`First-Time Defendants in Operating Company Cases
` 2014 NPE Litigation Report 6
`
`RPX Corporation
`RPX Corporation
`
` 2014 NPE Litigation Report 6
` 2014 NPE Litigation Report 6
`
`7
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`Litigation Trends
`“NPE Cases” remains Dk Blue as planned

`Litigation Trends
`“Operating Company Cases” is now Dk Blue, with 50%
`transparency
`That new chart style should work for these.
`Litigation Trends
`Chart 7: New Campaigns Filed
`Chart 7: New Campaigns Filed*
`Methodology Note: The campaign calculation is defined on page 38 in the
`Methodology section.
`“NPE Cases” remains Dk Blue as planned

`Litigation Trends
`“Operating Company Cases” is now Dk Blue, with 50%
`1,255
`transparency
`1,237
`1,147
`That new chart style should work for these.
`1,106
`
`Chart 7: New Campaigns Filed*
`887
`938
`
`732
`
`798
`
`1,237
`
`1,255
`
`299
`
`368
`
`1,106
`374
`
`1,147
`
`349
`
`2010
`938
`2010
`
`887
`2013
`2012
`2011
`798
`732
`2013
`2012
`2011
`Total Defendants added in Operating
`New Operating Company Campaigns
`New NPE Campaigns
`Chart 9: Total Defendants Added in Campaigns
`374
`368
`349
`299
`7,628
`
`7,084
`6,669
`2013
`2010
`2011
`2012
`6,057
`2,764
`Total Defendants added in Operating
`Chart 9: Total Defendants Added in Campaigns
`3,155
`2,498
`2,416
`Chart 9: Total Defendants Added in Campaigns
`7,628
`
`7,084
`
`929
`
`624
`
`929
`305
`
`2014
`2014
`624
`
`305
`
`2014
`5,343
`
`2,266
`
`Infringement Campaigns Filed
`Please make circles Blue for chart 8
`
`Please make circles Blue for chart 8
`Chart 8: NPE Campaigns Filed as Percentage of
`Chart 8: NPE Campaigns Filed as Percentage of All Patent
`All Patent Infringement Campaigns Filed
`Infringement Campaigns Filed
`Please make circles Blue for chart 8
`Chart 8: NPE Campaigns Filed as Percentage of All Patent
`Infringement Campaigns Filed
`100%
`90%
`34%
`Please make circles Blue for chart 8
`80%
`29%
`70%
`24%
`100%
`60%
`Chart 8: NPE Campaigns Filed as Percentage of All Patent
`90%
`50%
`Infringement Campaigns Filed
`34%
`80%
`29%
`40%
`
`30%
`
`30%
`
`33%
`
`33%
`
`29%
`
`34%
`
`30%
`
`33%
`
`2011
`29%
`2011
`2011
`
`34%
`2012
`2012
`2012
`
`2013
`30%
`2013
`2013
`
`33%
`2014
`2014
`2014
`
`70%
`30%
`
`24%
`
`60%
`20%
`24%
`50%
`10%
`2010
`2010
`24%
`2010
`
`40%
`
`0%
`
`30%
`
`20%
`
`10%
`
`0%
`
`Chart 10: Total NPE Defendants Added as Percentage
`of Total Patent Infringement Defendants Added
`Chart 10: Total NPE Defendants Added as Percentage 

`2010
`2011
`2012
`2013
`of Total Patent Infringement Defendants Added
`2010
`2011
`2012
`2013
`100%
`64%
`Chart 10: Total NPE Defendants Added as Percentage
`90%
`63%
`Chart 10: Total NPE Defendants Added as Percentage of
`of Total Patent Infringement Defendants Added
`80%
`Total Patent Infringement Defendants Added
`60%
`64%
`60%
`70%
`55%
`Chart 10: Total NPE Defendants Added as Percentage 

`100%
`60%
`of Total Patent Infringement Defendants Added
`55%
`90%
`50%
`
`2014
`2014
`
`63%
`
`58%
`
`58%
`
`3,929
`3,155
`
`4,864
`2,764
`
`6,057
`3,641
`
`2,416
`
`2010
`
`6,669
`4,171
`
`2,498
`
`60%
`20%
`2010
`50%
`10%
`2013
`2012
`2011
`55%
`40%
`0%
`Total Defendants added in Operating Company
`4,864
`*Note: The campaign calculation is defined on page 33 in the Methodology section
`30%
`4,171
`3,929
`3,641
`3,077
`RPX Corporation
`*Note: The campaign calculation is defined on page 33 in the Methodology section
`RPX Corporation
`2014
`2013
`2012
`2011
`2010
`2010
`2011
`2012
`2013
`2014
`*Note: The campaign calculation is defined on page 33 in the Methodology section
`Total Defendants added in Operating Company
`Total Defendants Added in Operating Company Campaigns
`RPX Corporation
`Total Defendants Added in NPE Campaigns
`*Note: The campaign calculation is defined on page 33 in the Methodology section
`RPX Corporation
`
`3,077
`5,343
`
`80%
`40%
`
`70%
`30%
`
`2,266
`2014
`
`20%
`
`10%
`
`0%
`2010
`
`64%
`
`64%
`
`55%
`
`2011
`
`60%
`2012
`
`60%
`
`63%
`
`63%
`
`58%
`
`2013
`
`58%
`2014
`
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`
` 2014 NPE Litigation Report 3
`
`2010
`2010
`
`2011
`
`2011
`2011
`
`2012
`
` 2014 NPE Litigation Report 7
`2013
`2014
`2014
`2012
`2013
`2012
`2013
`2014
`
` 2014 NPE Litigation Report 3
`
` 2014 NPE Litigation Report 7
`
`8
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`NPE Total Active Defendants Backlog Decreases
`The 2014 year-end backlog, a proxy for the overall scope and cost of NPE litigation,
`decreased 25% from 2013 as terminations outpaced new defendants. The rate of new
`defendants added decreased by 27% while the rate of terminations decreased by 6%.
`Use these colors please
`
`backlog at -17% and -18%, respectively. Companies with $100M–$1B in revenue had
`a backlog decrease of 35% and companies with $1B–$10B in revenue had a backlog
`decrease of 37%
`
`Methodology Note:
`The decrease in year-end backlog was widespread and not attributable to particular
`NPE Total Active Defendants Backlog Decreases
`The 2014 year-end backlog, a proxy for the overall scope and cost of NPE litigation, decreased 25% from 2013 as terminations outpaced new defendants. The
`“Total active NPE defendants” is the total number of NPE case/active defendant pairings.
`sectors or segments. The largest decreases came from E-commerce and Software
`rate of new defendants added decreased by 27% while the rate of terminations decreased by 6%.
`“Backlog” is the number of total active NPE defendants at the end of a given year. For example,
`(-37%), Networking (-34%), and Finance (-32%). Small (<$100M) and large
`
`at the end of 2010 there were 4,659 total active NPE defendants.
`(>$50B) companies experienced the smallest percentage decrease in defendant
`The decrease in year-end backlog was widespread and not attributable to particular sectors or segments. The largest decreases came from E-Commerce and
`Software (-37%), Networking (-34%), and Finance (-32%). Small (<$100M) and large (>$50B) companies experienced the smallest percentage decrease in
`defendant backlog at -17% and -18%, respectively. Companies with $100M-$1B in revenue had a backlog decrease of 35% and companies with $1B-$10B in
`revenue had a backlog decrease of 37%
`
`
`Chart 11: Active NPE Defendants Backlog
`Chart 11: Active NPE Defendants Backlog
`
`2011
`2011
`Backlog
`Backlog
`5,844
`5,844
`
`
`
`5,219
`+5,219
`
`4,052
`-4,052
`
`2012
`Backlog
`2012
`Backlog
`6,053
`6,053
`
`
`
`4,261
`+4,261
`
`5,315
`-5,315
`
`2013
`2013
`Backlog
`Backlog
`5,662
`5,662
`
`
`4,924
`+4,924
`
`5,014
`-5,014
`
`2010
`2010
`Backlog
`Backlog
`4,659
`4,659
`
`4,000
`-4,000
`
`2014
`2014
`Backlog
`Backlog
`4,273
`4,273
`
`
`3,625
`+3,625
`
`Backlog
`
`Terminations
`
`Additions
`Backlog
`Terminations
`Additions
`
` 
`
`
`
`+1,185 (25%)
`+1,185(25%)
`
`+209 (4%)
`+209(4%)
`
`-391 (-6%)
`-391(-6%)
`
`-1,389 (-25%)
`Backlog Growth
`-1,389 (-25%)
`Backlog Growth
`
`Methodology Notes: “Total active NPE defendants” is the total number of NPE case/active defendant pairings. “Backlog” is the number of total active NPE defendants at the end of a
`given year. For example, at the end of 2010 there were 4,659 total active NPE defendants.
`
`RPX Corporation
`
` 2014 NPE Litigation Report 8
`
`9
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`Defendant Addition Volatility During 2014
`3,625 total defendants and 2,072 unique defendants were added in 2014 to NPE
`cases. The rate at which defendants were added varied significantly throughout
`the year. The median weekly total defendants added and unique defendants added
`in NPE cases decreased 33% and 34%, respectively, from 2013 to 2014. The chart
`below shows the volatility of weekly NPE defendant additions in 2014.
`Total defendants: Dk Blue / Unique Defendants: Black with 70% transparency
`Li#ga#on  Trends  
`Defendant Addition Volatility During 2014
`3,625 total defendants and 2,072 unique defendants were added in 2014 to NPE cases. The rate at which defendants were added varied
`Chart 12: 2014 Weekly Defendants Added in NPE Cases
`significantly throughout the year. The median weekly total defendants added and unique defendants added in NPE cases decreased 33% and
`34%, respectively, from 2013 to 2014. The chart below shows the volatility of weekly NPE defendant additions in 2014.
`Large NPE Campaigns
`In April 2014, NPEs eDekka and Olivistar filed litigation
`Chart 12: 2014 Weekly Defendants Added in NPE Cases
`against over 135 companies. The large number of filings
`was likely motivated by proposed legislation that would
`have been retroactive to just after the filings, once again
`demonstrating how NPEs react to potential changes in
`the regulatory landscape.
`
`300
`300
`
`
`
`250
`250
`
`200
`200
`
`150
`150
`
`100
`100
`
`50
`50
`
`0
`0
`
`Octane and
`Highmark
`April 2014 Supreme
`Court decisions
`that lowered the
`standard for awarding
`attorney fees for
`extraordinary cases
`in patent cases.
`
`Alice
`A June 2014 Supreme Court decision which has
`been perceived by many to have made certain
`software patents easier to invalidate. The limits of
`the decision have yet to be fully interpreted by the
`lower courts and some believe that NPEs may be
`waiting on the sidelines or changing strategies in
`light of the decision.
`
`
`
`1
`
`2
`
`4
`
`3
`
`6
`
`5
`
`8
`
`7
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`30
`
`29
`
`31
`
`32
`
`34
`
`33
`
`36
`
`35
`
`38
`
`37
`
`40
`
`39
`
`41
`
`42
`
`43
`
`44
`
`45
`
`46
`
`48
`
`47
`
`50
`
`49
`
`51
`
`52
`
`Week of 2014
`Total Defendants
`Unique Defendants
`Total Defendants
`Unique Defendants
`
`RPX Corporation
`
`10
`
` 2014 NPE Litigation Report 9
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`Color per my notes on print out
`Color per my notes on print out
`Chart 13: Duration of NPE Cases Ended in 2014 (N=3,457)
`Color per my notes on print out
`Chart 13: Duration of NPE Cases Ended in 2014 (N=3,457)
`Chart 13: Duration of NPE Cases Ended in 2014 (N=3,457)
`Chart 13: Duration of NPE Cases Ended in 2014 (N=3,457)
`Color per my notes on print out
`Chart 13: Duration of NPE Cases Ended in 2014 (N=3,457)
`
`
`
`
`
`
`
`
`Chart 14: Duration of NPE Cases Active at Year-end 2014 (N=3,070)
`Chart 14: Duration of NPE Cases Active at Year-end 2014 (N=3,070)
`Chart 14: Duration of NPE Cases Active at Year-end 2014 (N=3,070)
`Chart 14: Duration of NPE Cases Active at Year-end 2014 (N=3,070)
`
`1
`
`Chart 14: Duration of NPE Cases Active at Year-end 2014 (N=3,070)
`
`100%
`100%
`90%
`100%
`90%
`80%
`90%
`80%
`100%
`70%
`80%
`70%
`90%
`60%
`70%
`60%
`42%
`80%
`50%
`60%
`50%
`70%
`40%
`50%
`40%
`60%
`30%
`40%
`30%
`50%
`20%
`30%
`20%
`40%
`10%
`1%
`20%
`9%
`10%
`30%
`0%
`2%
`1%
`1%
`10%
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`1-2 Yrs
`7-12 Mos
`0-6 Mos
`>5 Yrs
`0%
`20%
`9%
`4–5 Yrs
`3–4 Yrs
`2–3 Yrs
`0–6 Mos
`7–12 Mos
`1–2 Yrs
`>5 Yrs
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`>5 Yrs
`2%
`1%
`1%
`10%
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`>5 Yrs
`0%
`
`42%
`42%
`
`42%
`
`24%
`
`24%
`24%
`
`22%
`
`22%
`22%
`
`9%
`
`24%
`
`22%
`
`0%
`
`9%
`
`2%
`
`1%
`
`2%
`
`1%
`
`1%
`
`0.9
`1
`0.8
`0.9
`0.7
`0.8
`0.6
`0.7
`0.5
`0.6
`0.4
`0.5
`0.3
`0.4
`0.2
`0.3
`0.1
`0.2
`0
`0.1
`
`0-6 Mos
`
`7-12 Mos
`
`1-2 Yrs
`
`2-3 Yrs
`
`3-4 Yrs
`
`4-5 Yrs
`
`>5 Yrs
`
`1
`
`0.9
`
`0.8
`1
`0.7
`0.9
`0.6
`0.8
`35%
`0.5
`0.7
`0.4
`0.6
`0.3
`0.5
`0.2
`0.4
`0.1
`20%
`0.3
`5%
`2%
`1-2 Yrs
`7-12 Mos
`0-6 Mos
`3-4 Yrs
`2-3 Yrs
`4-5 Yrs
`0
`10%
`0.2
`5%
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`2%
`0.1
`4–5 Yrs
`3–4 Yrs
`2–3 Yrs
`0–6 Mos
`7–12 Mos
`1–2 Yrs
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`0
`Chart 16: Duration of Litigation for Defendants Active at Year-end
`4-5 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`2-3 Yrs
`3-4 Yrs
`Chart 16: Duration of Litigation for Defendants Active at Year-end
`2014 (N=4,273)
`2014 (N=4,273)
`Chart 16: Duration of Litigation for Defendants Active at Year-end
`2014 (N=4,273)
`Chart 16: Duration of Litigation for Defendants Active at Year-end
`2014 (N=4,273)
`Chart 16: Duration of Litigation for Defendants Active at Year-end 2014 (N=4,273)
`
`35%
`35%
`
`35%
`
`20%
`20%
`20%
`
`27%
`
`27%
`27%
`
`27%
`
`10%
`
`10%
`10%
`
`5%
`
`2%
`
`5%
`
`2%
`
`2%
`
`2%
`
`2%
`>5 Yrs
`>5 Yrs
`2%
`>5 Yrs
`>5 Yrs
`
`>5 Yrs
`
`0
`
`1
`
`1
`
`0.9
`
`0.9
`1
`0.8
`0.9
`0.7
`0.8
`0.6
`0.7
`0.5
`0.6
`0.4
`0.5
`0.3
`0.4
`0.2
`0.3
`0.1
`0.2
`0
`0.1
`
`0
`
`0.9
`1
`0.8
`0.9
`0.7
`0.8
`0.6
`0.7
`0.5
`0.6
`0.4
`0.5
`0.3
`0.4
`0.2
`0.3
`0.1
`0.2
`0
`0.1
`
`0.8
`1
`0.7
`0.9
`0.6
`0.8
`0.5
`31%
`0.7
`0.4
`0.6
`0.3
`0.5
`0.2
`0.4
`20%
`0.1
`0.3
`1-2 Yrs
`7-12 Mos
`0-6 Mos
`0
`0.2
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`0.1
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`0
`
`31%
`
`31%
`
`31%
`
`20%
`20%
`20%
`
`26%
`
`26%
`26%
`
`26%
`
`0-6 Mos
`0–6 Mos
`
`7-12 Mos
`7–12 Mos
`
`1-2 Yrs
`1–2 Yrs
`
`10%
`
`10%
`10%
`
`10%
`2-3 Yrs
`2-3 Yrs
`2-3 Yrs
`
`6%
`
`6%
`
`2%
`
`2%
`
`5%
`
`5%
`
`5%
`>5 Yrs
`5%
`>5 Yrs
`>5 Yrs
`
`6%
`2%
`3-4 Yrs
`4-5 Yrs
`6%
`4-5 Yrs
`3-4 Yrs
`2%
`4-5 Yrs
`3-4 Yrs
` 2014 NPE Litigation Report 4
`2-3 Yrs
`3-4 Yrs
`4-5 Yrs
`>5 Yrs
` 2014 NPE Litigation Report 4
`2–3 Yrs
`3–4 Yrs
`4–5 Yrs
`>5 Yrs
` 2014 NPE Litigation Report 4
`
`Chart 15: Duration of Litigation for Defendants Terminated in 2014
`Chart 15: Duration of Litigation for Defendants Terminated in 2014
`(N=5,014)
`Chart 15: Duration of Litigation for Defendants Terminated in 2014 (N=5,014)
`(N=5,014)
`Chart 15: Duration of Litigation for Defendants Terminated in 2014
`(N=5,014)
`1
`Chart 15: Duration of Litigation for Defendants Terminated in 2014
`1
`(N=5,014)
`0.9
`
`34%
`34%
`
`34%
`
`21%
`
`21%
`21%
`
`23%
`
`23%
`23%
`
`11%
`
`11%
`
`6%
`
`21%
`
`23%
`
`11%
`
`0.8
`1
`0.7
`0.9
`0.6
`0.8
`34%
`0.5
`0.7
`0.4
`0.6
`0.3
`0.5
`0.2
`0.4
`0.1
`6%
`0.3
`2%
`11%
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`1-2 Yrs
`7-12 Mos
`0-6 Mos
`0
`0.2
`6%
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`2%
`RPX Corporation
`0.1
`4-5 Yrs
`3-4 Yrs
`2-3 Yrs
`0-6 Mos
`7-12 Mos
`1-2 Yrs
`4–5 Yrs
`3–4 Yrs
`2–3 Yrs
`0–6 Mos
`7–12 Mos
`1–2 Yrs
`RPX Corporation
`0
`RPX Corporation
`0-6 Mos
`
`6%
`
`2%
`
`2%
`
`2%
`
`2%
`
`0
`
`2%
`>5 Yrs
`>5 Yrs
`2%
`>5 Yrs
`>5 Yrs
`
`7-12 Mos
`
`1-2 Yrs
`
`2-3 Yrs
`
`3-4 Yrs
`
`4-5 Yrs
`
`>5 Yrs
`
`RPX Corporation
`
` 2014 NPE Litigation Report 4
`
`11
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`Dark blue and tints of dark blue
`Dark blue and tints of dark blue
`Chart 17: NPE Cases Filed in 2014 by NPE Type
`Chart 17: NPE Cases Filed in 2014 by NPE Type
`Chart 17: NPE Cases Filed in 2014 by NPE Type
`
`Blue and tints of blue
`Blue and tints of blue
`
`Chart 18: Total NPE Defendants Added in 2014 by NPE Type
`Chart 18: Total NPE Defendants Added in 2014 by NPE Type
`Chart 18: Total NPE Defendants Added in 2014 by NPE Type
`
`Dark blue and tints of dark blue
`2% 1%
`8%
`8%
`Chart 17: NPE Cases Filed in 2014 by NPE Type
`
`2% 1%
`
`2% 1%
`
`8%
`
`Blue and tints of blue
`2% 1%
`2% 1%
`Chart 18: Total NPE Defendants Added in 2014 by NPE Type
`11%
`11%
`
`2% 1%
`
`11%
`
`PAE
`University
`Inventor
`NCE
`NCE
`Inventor
`PAE
`University
`
`PAE
`
`Inventor
`
`NCE
`
`University
`PAE
`
`Inventor
`
`NCE
`
`University
`
`PAE
`PAE
`University
`Inventor
`Inventor
`NCE
`NCE
`NCE
`Inventor
`University
`University
`PAE
`PAE
`Inventor
`NCE
`University
`
`89%
`Chart 19: New NPEs Filing Suit
`Chart 19: New NPEs Filing Suit
`
`158
`161
`158
`Chart 19: New NPEs Filing Suit
`Chart 19: New NPEs Filing Suit
`
`161
`
`167
`89%
`
`158
`
`161
`
`167
`
`89%
`
`167
`
`143
`
`143
`
`143
`
`143
`
`86%
`
`86%
`
`86%
`
`143
`
`143
`
`Color per my notes on printout
`Color per my notes on printout
`
`Color per my notes on printout
`
`2010
`
`2010
`
`2011
`
`2011
`
`2012
`
`2012
`
`2013
`
`2013
`
`2014
`
`2014
`
`RPX Corporation
`RPX Corporation
`2010
`2010
`
`2011
`2011
`
`RPX Corporation
`
`2012
`2012
`
`2013
`2013
`
`2014
`2014
`
` 2014 NPE Litigation Report 11
` 2014 NPE Litigation Report 11
`
` 2014 NPE Litigation Report 11
`
`12
`
`RPX Corporation
`
`2014 NPE Litigation Report | Litigation Volume
`
`

`
`55
`
`55
`
`50
`
`50
`
`47
`
`47
`
`37
`
`37
`23
`
`23
`14
`
`6
`2010
`2010
`6
`
`19
`
`19
`2011
`2011
`
`9
`14
`2013
`2012
`2013
`2012
`9
`NPE ITC Investigations
`2010
`2011
`2012
`2013
`Chart 22: Total Respondents Added to ITC Investigations
`NPE ITC Investigations
`Chart 22: Total Respondents Added to ITC Investigations
`599
`Chart 22: Total Respondents Added to ITC Investigations
`
`The ITC Continues to Be a Less Popular Venue for NPE Litigation
`NPE litigation in the International Trade Commission (ITC) spiked in 2011 and has
`decreased every year since. This may be attributable to a number of factors, including
`changes in the domestic industry requirement, the perception that the ITC is a
`political body, the political unpopularity of NPE assertions, and public support for
`measures combating NPEs.
`The ITC Continues to be a Less Popular Venue for NPE Litigation
`NPE litigation in the ITC spiked in 2011 and has decreased every year since. The decrease in ITC filings may be attributable to a number of
`• NPEs accounted for 16% of ITC patent investigations in 2014.
`The ITC Continues to be a Less Popular Venue for NPE Litigation
`factors, including changes in the domestic industry requirement, the perception that the ITC is a political body, the political unpopularity of NPE
`Chart 21: Initiated NPE Investigations as Percent of Initiated
`Chart 21: Initiated NPE Investigations as Percent of Initiated
`NPE litigation in the ITC spiked in 2011 and has decreased every year since. The decrease in ITC filings may be attributable to a number of
`• Samsung was the company targeted the most in the ITC in 2014 with four patent
`assertions, and public support for measures combating NPEs.
`ITC Patent Investigations
`ITC Patent Investigations
`•  NPEs accounted for 16% of ITC patent investigations in 2014.
`factors, including changes in the domestic industry requirement, the perception that the ITC is a political body, the political unpopularity of NPE
`investigations, two of which were NPE ITC investigations.
`•  Samsung was the company targeted the most in the ITC in 2014 with four patent investigations, two of which were NPE ITC investigations.
`assertions, and public support for measures combating NPEs.
`
`
`•  NPEs accounted for 16% of ITC patent investigations in 2014.
`•  Samsung was the company targeted the most in the ITC in 2014 with four patent investigations, two of which were NPE ITC investigations.
`Chart 21: Initiate