Happy New Year and welcome back to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Here's what's cooking as we kick off 2020:

• A quick look back at district court and PTAB filings in 2019.

• Haynes and Boone helps Nintendo smash alleged games pirate.

• My vote for the least consequential Supreme Court patent decision of the last five years.

• Another IP lateral for Barnes & Thornburg.

As always, you can email me your feedback and follow me on Twitter.

 

PTAB Filings Drop 23% in 2019

2019 was a downer year for patent litigation.

For the fourth year in a row, district court patent filings dropped, though this time by less than 1% , according to data from Unified Patents and Lex Machina.

The big shock is PTAB filings. After five consecutive years stuck in a range of 1,702 to 1,796, PTAB filings plunged 23% to 1,299 in 2019.

Now, the conventional wisdom holds that PTAB filings tend to track district court filings, albeit with a 12- to 18-month lag. But that wouldn't seem to explain this steep of a drop.

 

Chart courtesy of Unified Patents

Womble Bond Dickinson partner Brent Babcock thinks the factors also could include some of the steps PTO Director Andrei Iancu has taken to level out the playing field.

The PTO has cracked down on multiple petitions challenging the same patent, adopted the same claim construction standard as the federal courts, and made claims easier to amend during IPR. Those changes have made petitioners "a little more nervous" about filing, Babcock said. Amended claims, for example, carry the PTAB's stamp of approval, which can make them difficult to attack in district court.

With filings down, and the institution and cancellation rates hovering just over 60%, Babcock thinks the PTAB is nearing a point of equilibrium. Many petitioners will still like their chances better at the PTAB than before a jury, and meanwhile patent owners shouldn't have as much to gripe about. The overall invalidation rate of about 39% is not much higher than the European Patent Office, "and no one complains that the EPO is a patent killing machine," Babcock said.

Unified Patents' chief IP counsel, Jonathan Stroud, said the drop in PTAB filings should be considered against the surge of new patent issuance that Dennis Crouch highlighted earlier this week. That should put to rest the notion that inventors have lost confidence in the patent system, said Stroud.

He suggested another reason for the drop in filings is that well-funded non-practicing entities are "teaching to the test." That is, they're constructing portfolios of sufficient size and sophistication that attacking them patent-by-patent in the PTAB isn't cost-effective.

Unified is supported by tech companies and others that face frequent patent suits, and it files IPRs for their benefit. It's certainly doing its part to keep the PTAB busy: Unified filed three IPRs on Dec. 31, landing it in a tie with Microsoft and Samsung for third most active PTAB petitioner of 2019.

 

Nintendo and Haynes Get Their Smash on

Nintendo of America has drawn on Haynes and Boone to enjoin an Orange County man from selling unauthorized versions of Super Smash Bros. and other video games.

Nintendo had alleged in a December 2018 complaint that Sergio Mojarro was marketing illegal modification services for Nintendo Switch consoles along with illegally copied games, including some that had not yet been released in North America .

U.S. District Judge Josephine Staton signed off on a stipulated order Dec. 30 that enjoins Mojarro from hacking, modifying or circumventing Nintendo's technological protection measures and selling or distributing unauthorized copies of Nintendo works.

Partner Kenneth Parker and associate Diana Obradovich led Haynes and Boone's team, along with partner Richard Rochford and associate Joseph Lawlor. Sheppard, Mullin, Richter & Hampton partner Aaron Malo represented Mojarro.

U.S. District Judge Robert Kugler (photo by Carmen Natale/ALM)

 

The Little Supreme Court Engine That Couldn't

OK readers, help me out here: Name the Supreme Court patent case of the last five years that has most failed to live up to its initial hype.

I'm going to go with Impression Products v. Lexmark, the patent exhaustion case that was going to bring Qualcomm and other manufacturer-licensors to their knees. Apple predicted that Lexmark would force Qualcomm to choose between licensing and selling its modem chips, but we know how that's worked out so far. This week my ALM colleague Charles Toutant had the latest example of a company that thought Lexmark sounded a "death knell" for a manufacturer's IP suit, only to be turned away.

U.S. District Judge Robert Kugler of New Jersey ruled Monday that Lexmark did not abolish the doctrine that the sale of gray goods, even if materially different from goods authorized for sale in the U.S., necessarily creates confusion as to the source of those goods.

Kugler wrote that he was persuaded by a similar ruling from a New York judge in September.

IP Lateral – Barnes & Thornburg

My American Lawyer colleauges reported last month that Barnes & Thornburg added nine IP partners last month from Brinks Gilson & Lione.

Barnes isn't done quite yet. The firm also has added Patrick Gallagher as a partner in Minneapolis. Gallagher joins the firm from Cozen O'Connor. "Patrick has represented companies from all over the world and he is another great addition to our growing IP capabilities," Julia Gard, Barnes & Thornburg's chair of the firms IP department, said in a written statement.

Gallagher has experience in trademark and copyright issues, including trademark clearance, investigation, prosecution, client counseling, and management of client's domestic and international trademark portfolios.

"Patrick's substantial experience makes him a great addition to our growing firmwide IP team—but also to the strong talent we're adding here in Minneapolis," said Connie Lahn, Barnes & Thornburg's Minneapolis office managing partner.

That's all from Skilled in the Art this week. I'll see you all again on Tuesday.