Chicago, Boston Get More Patent Suits Despite Overall Decline

Two federal courts dramatically defied a downward trend in new patent lawsuits from 2021 to 2022—and they aren’t in traditionally popular Texas or Delaware.

Patent litigation dipped 5.6% across the country and the drop off was steeper in the country’s busiest patent districts, even as case numbers jumped in some previously less-used venues.

Chicago’s Northern District of Illinois and the Boston-centered District of Massachusetts showed increases of 35.3% and 81.8%, respectively, according to Bloomberg Law data. That’s a stark contrast from the decline in the nation’s busiest two patent districts—the Western District of Texas and the District of Delaware, which saw 12.8% (126) and 24.8% (219) fewer cases, respectively.

So, how to explain the increases in patent litigation activity in Chicago and Boston?

“I don’t think it’s cases being driven out of Delaware or Western Texas,” said David Donoghue, a Chicago patent litigator and partner at Holland & Knight LLP.

Suits fell in those districts in the wake of several new local orders aimed at judge-shopping and third-party litigation funding. Delaware federal judge Colm F. Connolly beefed up disclosure requirements in civil cases and scrutinized certain third-party funding arrangements in several patent cases there. In West Texas, the former chief judge instituted a rule that randomized where new patent cases filed in the Waco Division would be assigned so that they don’t all go to former patent litigator Judge Alan D. Albright.

For Illinois and Massachusetts, Donoghue and other attorneys credited a combination of location and local rules that make them convenient for plaintiffs, including non-practicing entities—companies that don’t manufacture the products described in their patents but instead monetize the patents through licensing and litigation.

Windy City Rising

The Northern District of Illinois experienced the largest year-over-year increase in patent cases in terms of raw numbers, with 211 new suits filed in 2022, 55 more than in 2021.

Donoghue pointed to other factors behind the increase, which put it in a dead heat with the Central District of California for the fourth-busiest patent district nationwide.

Specifically, he noted “a resurgence of NPE campaigns filed in the Chicago federal courts.”

Another factor could be Doe-defendant cases involving design patents and targeting companies that sell counterfeit goods to US consumers.

Amy Ziegler, an attorney at Greer, Burns & Crain Ltd. in Chicago, which has developed a specialization around anti-counterfeiting lawsuits, said that with the Covid-19 pandemic “we saw an overall uptick in both counterfeiting and design-patent infringement as everyone shifted to online shopping.”

Ziegler and her colleagues have filed cases in 2022 on behalf of sunglasses company Oakley Inc. and UGGs maker Deckers Outdoor Corp., among others.

She said the suits are initially filed against unnamed defendants because plaintiffs aim to secure a temporary restraining order without notice to the other side, which makes it possible to freeze assets in payment-provider accounts like PayPal before defendants can move money offshore.

The Northern District of Illinois “is quite familiar with these types of cases and has procedures in place to handle them efficiently,” Ziegler said.

Filings Up in Beantown

A smaller venue that saw an even bigger percentage leap in patent cases in 2022 is the US District Court for the District of Massachusetts.

After a slow year in 2021—with only 33 new patent infringement cases being filed in the district—new patent cases jumped to 60, more than an 80% spike.

Barbara Fiacco, co-chair of Foley Hoag LLP’s patent litigation practice, chalked up the increase in part to a burgeoning life sciences industry in the Boston area.

“The incredible growth we’ve seen in life sciences companies has led to a growth in litigation,” she said.

Rebecca McNeill, president of the Boston Intellectual Property Law Association and a partner at McNeill Baur PLLC, agreed.

“While Massachusetts has long been a hub of invention and development, its prominence in many scientific areas keeps growing,” she said.

NPE Activity

In at least one respect, the patent litigation picture in Massachusetts reflects a national trend driven by where NPEs choose to file their lawsuits.

NPE suits accounted for 60% of all patent litigation in 2022, according to a report by Unfied Patents LLC, a membership group that both challenges the validity of certain patents at the US Patent and Trademark Office and also publishes statistics about patent litigation.

Fiacco said that of the new 2022 filings in Massachusetts, a “bunch are connected to one entity.”

Bell Semiconductor LLC, an NPE, filed at least 66 patent infringement suits in federal district courts across the country targeting semiconductor companies that year.

Fiacco counted 31 Bell Semic cases in Massachusetts, though she said some of those have since been transferred, settled, or consolidated.

Local Procedures

Patent lawyers in both Boston and Chicago said local rules that provide a measure of certainty around how patent cases will progress also may have played a part in the uptick in filings.

Massachusetts “updated the local rules in mid-2018 in a way that put more of a framework around infringement contentions and invalidation contentions, timing of the claim construction hearing, and time to trial,” Fiacco said.

“The prior local patent rules were pretty fluid,” she said, so the updates allowed for more predictable scheduling.

Donaghue said that in Northern Illinois local rules are written in a manner that cuts down on “preliminary fights over things like protective orders,” and the local patent rules are “even and fair and not too tilted toward plaintiffs or defendants.”