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While most economic scholarship analyzing the importance of the courts has focused on disputes over real property, the relationship between the court system and investment is no less strong for intellectual property. And to a large extent, the relationship between the courts and the patent system depends on the quality of “judicial human capital.”

In the United States, as in many countries, the courts are a crucial part of the patent system to the extent that the patent system is can be termed a two-stage process. In the first stage, the U.S. Patent and Trademark Office grants property rights to inventors. In the second stage, inventors can protect those rights through patent infringement suits in the courts and alleged infringers have the right to challenge improvidently granted patents and have them declared invalid. As a consequence, some authors have referred to patent rights as being “probabilistic,” depending not only on whether the innovation embodied in the patent has commercial value, but also on the refinement of that patent property right after litigation.15

The licensing and sale of patents - the ‘market for innovation’ - are an important source of R&D incentives. Recent research has shown that transactions in patent rights contribute to the diffusion of technology, and strongly affect the incentives for firms to undertake innovation in the first place (Arora, Fosfuri and Gambardella, 2001). Firms increasingly recognize and exploit the commercial potential of their patent portfolios through licensing. To cite one high profile example, IBM reports earning 958 million from its portfolio.1 But the market for innovation is not just important for large firms. For small firms patents are often their most important asset, and the ability to license or sell them effectively is critical to preserving their innovation incentives and access to venture capital finance (Baum and Silverman, 2004). Moreover, transactions in patent rights are important to the development of efficient market structures in high technology sectors. In biotechnology and other high technology areas, transactions in patent rights strongly shape the division of labor, and nature of competition, between small firms who specialize in radical innovation and larger firms whose comparative advantage is in the development, production and marketing of these innovations (Gans, Hsu and Stern, 2002). One of the difficulties in studying transactions in patent rights is the lack of large scale data sets. As a result, existing studies are typically based on survey information. The only exception of which we are aware is Serrano (2009), who exploits patent office information on changes in the registered ownership to study the sale of patents. In this paper we study the market for innovation through a new lens — the settlement of patent infringement disputes. It is common for patents to be licensed as part of settlement agreements that arise from patent disputes (Anand and Khanna, 2000). An effective market for innovation requires that such disputes are settled as quickly as possible. Delay and uncertainty in the settlement and licensing process mean slower diffusion of patented technology. Moreover, longer delays would typically be associated with higher transaction costs for the negotiating parties.2 We use comprehensive data on the timing of settlements in patent disputes filed in U.S. courts to study this issue. As a window on the market for innovation, studying the duration of patent disputes has both advantages and limitations. First, the speed with which disputes are resolved is itself important for innovation, and an indication of how well the market for innovation works. The second advantage is that we have much more extensive data on patent settlements than on licensing. In particular, this paper exploits information on essentially all patent cases filed in U.S. courts over the period 1978-2000. The main limitation of our empirical strategy is that we do not observe the terms of patent settlements, and thus do not know whether licensing actually occurred as part of the agreement (or court order).

So far, legislative action against the practice has been meager. In May, Gov. Peter Shumlin, Democrat of Vermont, signed legislation — the first of its kind — that amends the state’s consumer protection laws to empower its attorney general and others to sue patent holders who assert infringement claims against a Vermont business or resident in bad faith. But lawmakers in the remaining 49 states and in Congress, where no less than four bills now sit in various committees, have yet to legislate specifically against patent trolling.

Mr. Obama’s latest proposals echo those in several bills, including making it harder for patent litigants to set up shell companies to hide their activities.

Beyond the prior discussion of benefits arising from patent ownership, a relevant secondary consideration is the social cost that may arise from AI patents. More specifically, it is prudent to determine how these patents might be monetized and the societal impact arising therefrom. This concern is germane to a primary issue in modern patent scholarship, namely attempts to discourage the patent assertion entity (also referred to as “patent troll”) business model.288 The below discusses how AI patents might further troll litigation if these rights were allocated to software companies (in contrast to being allocated to AI users, as proposed herein).Societal costs associated with patent troll litigation are substantial.289 Activity of this nature cannot proceed, however, unless trolls are able to purchase patents.290 That end is furthered where—as discussed below—patentees have no means of financially exploiting a patent except selling it. This would be the situation for many AI patent owners if patent rights were given to parties other than market participants (e.g., software companies).There are limits on how software companies may monetize a patent. As specialized AI firms, these companies will not generally be engaged in commerce related to the field of the AI’s invention.291 This constrains their sources of patent value to licensing or sale of the patent,292 which in turn expands the market for discount patents (and thus, furthers patent troll activity). Such a conclusion is made clear though a discussion of avenues available for software companies to monetize their AI patent holdings. In some instances, software companies might assign their patent to downstream AI users (e.g., firms licensing the use of the AI), and the patent is off the market.293 Likewise, software companies may sell licenses to use the patented technology and retain all substantial rights, including the right to sell the patent and sue for infringement.294 Neither of these situations create immediate worry. Patent troll concerns arise where a software company (that has been allocated relevant patent rights) issues a terminal number of licenses and is left holding a patent which it has no intention or capacity to exploit in commerce.295 The economically rational choice at that point is to sell the patent for any non-zero sum.296 This can positively reflect on the bottom line without inhibiting the rights of past licensees.297 This act, however, additionally benefits trolls looking to purchase inexpensive patents.298

Love it or hate it, the growing adoption of generative artificial intelligence tools has given society no choice but to grapple with their novel challenges, and in 2024, trailblazing litigation over AI's impact on intellectual property, civil liberties and privacy will be hashed out in courtrooms across the country. In 2024, courts will be tasked with weighing in on matters of first impression in litigation over the development and use of generative AI — the umbrella term for models or algorithms that can create content from the data on which they are trained. Generative AI lawsuits are beginning to pile up, and so too are novel legal questions: Are tools such as ChatGPT trained and deployed in a law-abiding manner? Does their output constitute intellectual property? Who can be held liable for any harm caused by their output? The answers to these and other questions about generative AI will come before judges in the year ahead, and those answers are sure to have broad implications across industries and across society. Here, Law360 spoke with legal experts about the AI litigation likely to create the biggest waves in 2024, and what's at stake. Algorithmic Bias While many companies have embraced AI, not everyone has seen the benefit. In 2023, Derek Mobley, a California resident, brought a putative class action claiming the human resources software provider Workday uses a discriminatory AI-powered hiring tool. Mobley claims he received rejections from dozens of jobs posted by employers using Workday's AI-powered applicant screening software because he's Black, older than 40 and has anxiety and depression. He says Workday's applicant screening software has algorithmic bias against African Americans who are over 40 and have a disability, which he says violates Title VII of the Civil Rights Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act. Workday denies the allegations. The Workday case presents new legal questions and could push the courts to provide early answers about whether vendors can face liability for AI products that yield biased results. Peter Schildkraut, co-leader of the technology, media and telecommunications industry team at Arnold & Porter Kaye Scholer LLP, told Law360 that he's watching to see if this case survives a motion to dismiss. "That would be significant, because employment discrimination statutes typically subject employers, employment agencies and labor unions — but not their technology vendors — to liability for violations," he said. Mobley isn't the only one who claims harm caused by an AI tool. The estates of Gene B. Lokken and Dale Henry Tetzloff — both of whom were insured by UnitedHealth prior to their deaths — claim UnitedHealth Group Inc. uses a flawed AI model, called naviHealth predict, to determine coverage criteria for patients. The putative class action, filed in November 2023 against UnitedHealth in Minnesota federal court, alleges that the insurer knowingly used an AI tool with a high error rate to override physician recommendations and to deny elderly patients care owed to them through Medicare Advantage healthcare plans. Lokken's and Tetzloff's estates argue that UnitedHealth's AI model determines patients' coverage criteria for post-acute care settings with "rigid and unrealistic predictions for recovery" and overrides what an actual physician recommends, purportedly resulting in the denial of recommended and needed care. The country's largest health insurance company then "bank[s] on the patients' impaired conditions, lack of knowledge, and lack of resources to appeal the erroneous AI-powered decisions," according to the complaint. UnitedHealth Group has not yet responded to the complaint, but it told Law360 in mid-December that "the naviHealth predict tool is not used to make coverage determinations." "The tool is used as a guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home. Coverage decisions are made by medical directors and are consistent with [Centers for Medicare & Medicaid Services] coverage criteria for [Medicare Advantage] plans and the terms of the member's plan," UnitedHealth Group said. "This lawsuit has no merit, and we will defend ourselves vigorously." Schildkraut said this case "may begin to define the circumstances under which companies using AI systems are liable for the systems' mistaken decisions." As courts begin to resolve these AI-focused cases, Schildkraut said, there will be greater clarity on how existing laws do and do not address the new fact patterns arising from AI tools. And legislators will have greater clarity on the gaps they will need to fill," Schildkraut said. Another discrimination case to watch is that of Illinois residents Jacqueline Huskey and Riian Wynn, who say State Farm's claims processing algorithms create discriminatory outcomes for Black homeowners in violation of the Fair Housing Act. In a 2022 putative class action, Husky and Wynn claim that State Farm's automated claims review process incorporates "historically biased housing and claims data" that led to their property damage claims being delayed, scrutinized more heavily and ultimately covered to a lesser degree than those of their white neighbors. Husky and Wynn's complaint says that State Farm "does its best to keep the nature of its claims processing methods confidential," but that they believe its automated claims review process relies on AI, pointing to the insurer's career page, which states that it recruits and hires employees with a background in data analytics to "turn data into actionable insights by leveraging a combination of Natural Language Processing, Machine Learning, Artificial Intelligence, or other data science tools and concepts." State Farm, which did not respond to a request for comment, moved to dismiss the suit in May, asserting that FHA disparate impact liability has never been applied to insurers, and that even if the claims were cognizable, they'd be barred by the McCarran-Ferguson Act, which gives states the authority to regulate the business of insurance. In September, an Illinois federal judge trimmed the claims, but allowed the discrimination case to continue. With the new year will come new class actions asserting improper use or development of generative AI solutions, Chuck Hollis, a partner at Norton Rose Fulbright who focuses on technology and AI, told Law360. "As more and more companies build, train and deploy generative AI solutions in 2024, they will increase their liability and exposure to class action claims related to data privacy, discriminatory actions and decisions, civil rights violations and related claims," Hollis said. IP Creators Sue Big Tech. John Grisham's latest legal thriller takes on artificial intelligence, but this time, it's not a work of fiction. In the last half of 2023, Grisham and dozens of other writers filed lawsuits alleging tech companies violated their copyrights by using their written works to train the large language models, or LLMs, that power generative AI tools, raising novel legal issues that will be up to courts to decide in the year ahead. Grisham and fellow members of the Authors Guild sued OpenAI and Microsoft in New York federal court, claiming that training ChatGPT on the authors' written works is copyright infringement. Author Julian Sancton also sued OpenAI and Microsoft in New York. Meanwhile, in California federal court, OpenAI has been hit with a lawsuit from Pulitzer Prize winner Michael Chabon. Comedian Sarah Silverman and authors Christopher Golden and Richard Kadrey have sued both OpenAI and Meta, pointing to the companies' AI products, ChatGPT and LLaMA, respectively. Authors Paul Tremblay and Mona Awad have filed a copyright suit against OpenAI in California as well. The authors say the unlicensed use of books to create large language models that generate texts is a threat to their profession and that generative AI models must seek permission to use their works. But Meta urged the judge to toss the bulk of the the Kadrey suit in September, arguing that the use of texts to train LLaMA "to statistically model language and generate original expression is transformative by nature and quintessential fair use." In November, U.S. District Judge Vince Chhabria dismissed without prejudice claims of vicarious copyright infringement, unfair competition and unjust enrichment from Kadrey, Golden and Silverman's case against Meta, but kept the writers' core theory of copyright infringement intact. The writers filed an amended complaint in December. "Unsurprisingly, the courts want to see allegations of substantial similarity to support copyright infringement claims and, absent this, are skeptical of allowing infringement claims to survive the pleading stage," Arnold & Porter partner Ryan Nishimoto told Law360, pointing to Judge Chhabria's initial dismissal order in that case. The court may similarly trim the consolidated case against OpenAI, Nishimoto said. Dan Jasnow, co-leader of the AI, metaverse and blockchain industry practice group at ArentFox Schiff LLP, said the authors' cases will set up "one high-stakes copyright infringement case against ChatGPT, and another against LLaMA." Jasnow said the most powerful AI tools have been trained on massive amounts of content without authorization from their creators, with developers assuming that use of these third party works qualifies as "fair use" under the Copyright Act — an argument that Jasnow says "has never been directly tested in the context of gen AI." "After much of 2023 was devoted to pretrial motions and resolving secondary claims, courts are likely to start considering the plaintiffs' core infringement claims in 2024," Jasnow told Law360. "The next year may determine whether the current moment in gen AI is more akin to the 'Napster Era' or the 'Spotify Era' of music streaming." In mid-2023, consumers also filed a putative class action against Google claiming its artificial intelligence chatbot, Bard, was trained on data secretly harvested from hundreds of millions of people. Visual artists have also sued Stability AI Ltd., Midjourney Inc. and art-sharing website DeviantArt Inc., claiming the companies — which all use Stability AI's partly open-sourced software, Stable Diffusion, in their various generative AI programs — copied and stored billions of copyrighted images without consent. In October, a California federal judge tossed all but one of the copyright claims, allowing the artists to amend their complaint to include greater specificity. Stability AI has also been sued in both Delaware and the U.K. by Getty Images, which similarly alleges that the AI company is engaging in copyright infringement by scraping data from its websites without consent, and further asserting that certain images produced by Stable Diffusion contain a modified version of Getty's signature watermark. Stability AI has asked the Delaware court to dismiss the case or transfer it to California. Agatha Liu, a partner at Duane Morris LLP, told Law360 that since the content that AI models put out are often similar to the data they were trained on, "copyright infringement may exist at multiple levels" in the Getty case. Following a criminal probe, gamers have also brought a novel suit involving AI, alleging that AviaGames Inc. engaged in a racketeering scheme by using AI to manipulate games of skill to dupe unwitting gamers out of nearly $1 billion. In their November 2023 suit, the gamers said they believed they were competing against humans, when they were actually playing against bots that were programmed to win. AviaGames is facing other legal challenges this year, including a February patent infringement trial brought by rival mobile game maker Skillz. Elsewhere, in an unusual AI-related case in Georgia state court, Mark Walters, a pro-gun rights radio host, sued OpenAI in December 2023 claiming ChatGPT defamed him when someone used it to produce a fake complaint naming Walters as a defendant. OpenAI, for its part, says another person who used the chatbot to do research on a real legal case was the owner of the text ChatGPT produced, and that OpenAI cannot be sued as the publisher. Defining an Inventor. While there's a good amount of litigation seeking to hold generative AI tools and companies liable for IP infringement, there are also a number of cases to watch that are seeking to create legal rights for output created by generative AI tools. For instance, artificial intelligence researcher Stephen Thaler, who created the generative AI machine, DABUS, has been making a splash with lawsuits challenging the idea that only humans can be holders of copyrights and patents. Thaler's crusade has seen setbacks, with the U.S. Supreme Court in April 2023 refusing to review a Federal Circuit ruling preventing AI tools from being named as inventors on patents, and in mid-December, the U.K. Supreme Court ruling against Thaler when it found that British law requires a "natural person" to be behind an invention. Thaler, who argues that allowing only humans to be inventors will hinder innovation, has a parallel legal fight pending over copyrights. In October, Thaler appealed a Washington, D.C., federal judge's ruling that only people can have copyright protection. Thaler's U.S. appeal could be quite consequential, according to University of Pennsylvania Carey Law School professor Cary Coglianese. "There's potentially a lot at stake here given the ease with which generative AI can produce content, making anyone with a keyboard and internet connection an artist or an author and thus vastly expanding the potential for intellectual property disputes," Coglianese told Law360. "This case is emblematic of a larger set of legal issues for the courts to resolve about intellectual property and generative AI tools." Bracing for Action. As the new year begins, businesses and attorneys are expecting the Federal Trade Commission to launch civil investigations into unfair or deceptive use of AI. Eric Vandevelde, co-chair of the AI practice group at Gibson Dunn & Crutcher LLP and a former deputy chief of the cyber and IP crimes unit of the U.S. Attorney's Office for the Central District of California, told Law360 he thinks regulators "are very keen on investigating the potential misuse of AI technologies." He said he expects state and federal regulators in 2024 to use their existing authority to investigate the development and use of AI technologies and to determine whether they harm consumers, investors, patients or others. In a November resolution, the FTC created a subpoena-like process to streamline the agency's AI probes. Rebecca Engrav, co-chair of the artificial intelligence and machine learning practice at Perkins Coie LLP, said the move "indicates that the FTC intends to conduct investigations specifically regarding products or services that use or claim to have been developed using AI, or that 'purport to use or detect the use of artificial intelligence.'" "Companies engaging in these practices will want to be attuned to the possibility of FTC investigation," Engrav said. Coglianese, of Penn Carey Law, said he's watching what the FTC will do in 2024 with its open investigation of OpenAI. An enforcement action against OpenAI, Coglianese said, could turn out to be crucial for other tech firms producing generative AI tools, he said. "We don't know exactly what the commission will settle upon, if it decides to take an enforcement action," Coglianese said. "But the commission has broad investigatory powers over unfair and deceptive trade practices, and it appears to be looking into data security at OpenAI as well as seeking a detailed inquiry into how the ChatGPT model is managed and trained."

(viii) Digital Inventions and Innovation The advent of AI has given rise to a debate about the degree to which the use of AI technologies will affect the granting of IPRs and the IP system more generally. There are many challenges associated with AI inventions in the future patent environment. As AI-based inventions continue to advance, new challenges rise in the IP system relating to the human contributions affecting both inventorship and ownership, and patentability. A fundamental concept of the IP system is to grant IPRs to protect concretion of ideas. This poses many questions relating to whether the current IP framework should be amended to incorporate these AI-based thinking machines and their inventions to be eligible for IPRs. Indeed, at the rate AI is evolving it may get to a point where it is able to think and to invent. In January 2019, WIPO published an AI-themed edition of its Technology Trends report, which found that 50 percent of all AI patents globally have been published in the last five years. Patent activity in this field grew by 650 percent between 2011 and 2017. Moreover, the growth rates observed in the identified AI-related patent data are higher than the average annual growth rate for patents across all areas of technology, which was 10 percent between 2013 and 2016. With the reality that AIs will be generating new inventions or new invention leads, the applicability of the traditional patent law requirements and their underlying policies are being challenged, especially with regard to such key considerations as inventorship (can an AI be considered an inventor?), ownership (can ownership be attributed to an AI; if not, then who is the owner—the software developers, the data scientists who provide data to the AI algorithm, hardware developers or another party altogether?), who (or what?) constitutes a person skilled in the art, as well as issues relating to novelty, inventive step/obviousness, state of the art, and disclosure, to name a few. It is worth noting that the decision in Thaler v. Comptroller General of Patent TM and ID of UK (2020)17, and Thaler v. Commissioner of USPTO18 have resolved to decide against granting inventorship rights to a creativity machine (AI). Neither will the owner of the machine be entitled to any right because he/ she did not invent, nor can he/she own by assignment because a machine cannot assign anything. In the 90s, the Internet prompted many cultural and business changes that influenced the copyright system. Now, WIPO members and observers are studying the potential impact of AI on the IP system including patents and other IP rights. The digital economy continues to grow in importance. Digital inventions have value both in themselves and in facilitating other economic activity. Consequently, it is important that the rules for patentability are consistent, well understood and harmonized across jurisdictions. While the degree to which the use of AI technologies will affect established IPRs such as patents, trademarks, and copyrights is uncertain, it is critical to ensure that the IP system and the IPO of the Future is well-equipped to support the emergence of transformative technologies. Long established principles of IP laws, such as those defining thresholds of originality and disclosure requirements, may provide built-in means for the IP framework to adapt to new realities, as they have done with other disruptive technologies in the past. Indeed, AI has permeated the entire world of IP. This includes trademarks and designs with instances such as analyzing novelty, enabling assessments of level of distinctiveness, and enabling trademark comparisons to consider potential conflicts. For instance, WIPO has developed a tool that uses AI to search through trademark images, enabling results regarding comparisons and whether a proposed trademark is generic to be generated within seconds. In addition, AI is being used to examine audio and visual fingerprints to detect uploaded material that infringes on another’s copyright, significantly improving private copyright policing efforts. AI-based patent application drafting systems have also recently emerged, substituting the work of patent attorneys. These systems have challenges to overcome before they can generate complete and accurate patent specifications, but their current capabilities and the rapid advancement of the technology indicates that this potential is not so far away. Millions of machine-generated patents could clog the system, impacting genuine innovations as well as competitiveness. On one hand, companies can use computer-generated claims to saturate the technical space around their own patents to prevent competitors from obtaining improvement patents in the same area. On the other hand, companies can also saturate the technical space around their competitors’ patents to prevent the competitors from subsequently patenting improvements on the competitors’ own inventions. The challenges discussed above surrounding patenting digital inventions, including AI, may result in digital innovators looking for other ways to protect their ideas and obtaining some monopoly. How will this affect further innovation and the spread of knowledge to public? Is it time to start considering a different type of IPR with different tests for such inventions? Is it time to codify how AI’s role is to be viewed in instances of infringement?

d. Expanding patent eligibility to include non-technological innovations would cause real and substantial harms. While patents on football plays and marriage proposals are not themselves of much concern to HTIA, they demonstrate the vastness of the non-technological subject matter that falls between what is currently patent eligible and what would be eligible under PERA. As amply demonstrated by the history of patent litigation in this country, HTIA’s concerns are more than credible, given the well-documented harm imposed on HTIA members (and many others) by the assertion of patents for non-technological “inventions” such as business methods prior to the Alice decision. Having experienced the flood of lowquality patents claiming business methods “on a computer” in the wake of the introduction of personal computers and a second flood of similarly harmful patents claiming nontechnological processes performed “on the internet,” HTIA members and other similarly-situated technology companies were forced to absorb billions of dollars of additional (and completely unnecessary) litigation costs in order to defend themselves against infringement suits based on patents—mostly involving obvious implementations of business methods—that were invalid under Supreme Court caselaw and should never have been issued. In addition to these very sizeable direct economic costs, tech companies have also experienced first-hand the substantial business distractions, disruption, and uncertainties associated with the meritless—but all too often profitable—assertion of invalid patents. The expansion of patent eligibility to nontechnological subject matter is of particular concern to HTIA due to the decreased availability of review by the PTAB—largely as a result of the practice of discretionarily denying meritorious petitions – and because the PTAB is not allowed to consider patent ineligibility as grounds for cancellation in an inter partes review. Based on these very negative first-hand experiences and the well-documented litigation abuses that resulted from these past booms in patenting, HTIA and its members would urge Congress not to squander America’s current technological advantages with respect to critical emerging technologies such as artificial intelligence and quantum computing by repeating these past mistakes. Some argue that concerns about extending patent eligibility to non-technological subject matter should be dismissed because problematic patents would be screened out by sections 102, 103, and 112. This argument is refuted by historical experience. The truth is that, prior to Alice, patents on equally “silly” (and seemingly obvious) inventions—such as swinging sideways on a swing21 or exercising a cat using a laser pointer22—were not screened out by other statutory requirements but rather were issued. More importantly, this argument misses the point that allowing the patenting of nontechnological processes undermines the core purpose of the patent system irrespective of whether the activity at issue is novel, non-obvious, and adequately enabled and described. For example, there is evidence that the availability of patent protection for business methods directly harmed investment in technological R&D.23 Disincentivizing investment in technological innovation is the opposite of the purpose of patent protection—and the opposite of what would promote U.S. competitiveness and economic growth.

The Federal Circuit’s decision to expand the scope of a judge-created rule for invalidating certain patents may impact nearly half of US patents and is likely to cost US biopharma and technology innovators billions of dollars. For these reasons and others, the US Supreme Court should take up and reverse In re Cellect, preserving statutory guarantees. In re Cellect diminishes the intent of Congress and undercuts its decision to fundamentally alter the US patent system in 1994 to align it with the rest of the world. Congress changed the starting point of a patent’s term to 20 years from when an inventor filed a patent application, rather than 17 years from the time the patent was granted. This altered the impact of US Patent and Trademark Office delays in examining patents. Under the old system, delays had no impact on patent term because it was measured from patent issuance. But starting the clock on the date of filing a patent application meant delays began consuming the effective term of the patent, resulting in a diminished value and creating a need to restore lost patent term. The 1999 Patent Term Guarantee Act, part of the American Inventors Protection Act, was the chosen remedy. It promised inventors a full patent term adjustment for any examination delay caused by the USPTO. It guaranteed that the term of a patent would be extended one day for each day of USPTO delay. Given the prevalence of delays, the USPTO adjusts the terms of approximately half of the patents it issues, according to data from 2005 to 2022. This has caused patents to inventions from the same initial application to routinely expire later than others in the same patent family, and the difference in their terms is due to the adjustment. In re Cellect turns Congress’s statutory guarantee on its head. It concerns patents in the same family, some with patent term adjustment and some without, that would have all expired on the same day but for the delays of the USPTO in issuing some of the patents. Cellect LLC had asked the Federal Circuit to overturn a decision by the Patent Trial and Appeal Board to invalidate four imaging tech patents on the grounds of “obviousness-type double patenting,” or OTDP. It argued that the Board improperly broadened the reach of OTDP and, in the process, erroneously punished patent owners whose patent terms have been adjusted. The OTDP is a judicially created doctrine to prevent unjustified extensions of a patent’s term because of patents that are obvious versions of one another. Patent term adjustment was the sole basis for invalidity. The Federal Circuit upheld the Board’s decision, saying it was grounded in the statute because patent term adjustment is not guaranteed in all circumstances. It can’t be used to compensate patent applicants that have voluntarily shortened the term of their patents to avoid OTDP or for other reasons. The problem with that analysis is that patents with term adjustments aren’t patents with voluntarily shortened terms. If they were, in accordance with statute, they would have no patent term adjustment. The Federal Circuit’s decision also is at odds with its own prior rulings. It previously recognized that patents with so-called patent term extensions for delays due to Food and Drug Administration review of drugs for marketing approval couldn’t be invalidated based on statutorily guaranteed term extensions over patents in the same family that didn’t have those extensions. Widespread Impact. Cellect’s petition for en banc review at the Federal Circuit was denied, and their petition at the Supreme Court was filed Monday. While the case involves tech patents, Cellect’s en banc petition was supported by pharmaceutical giants, including Johnson & Johnson, Merck, AstraZeneca, Novartis, and others. It is now time for the justices to restore Congress’s patent term guarantee. The impact of In re Cellect is enormous, as it largely undoes Congress’s Patent Term Guarantee Act. A single patent application often includes multiple inventions and results in numerous patents. For example, biopharma companies typically obtain claims for a new drug in one patent and the method of making and using the drug in separate patents. As another example, an automotive company may claim an image processing system to control high-beams in one patent and high-beams comprising such system in another. If patent term adjustment is received on one but not the other patents, which is typical, then the patent with the adjustment may be invalidated. Indeed, patents across industries have been invalidated solely based on patent term adjustment. USPTO data shows that the average patent term adjustment granted from 2005 to 2022 generally exceeds six months and that many patents have years of term adjustments. Millions of patents are now at risk for invalidation solely based on patent term adjustment. More than 380,000 patents were issued in fiscal year 2022 alone. In re Cellect robs innovators of both time and money, because every day of patent term can be worth tens of millions of dollars. It turns guarantees to uncertainty and denies diligent US inventors promised patent terms, devaluing their investment. The Federal Circuit’s decision hurts big companies, and it hurts universities and small companies that rely on predictable licensing revenue or on being acquired based on their ability to adequately protect their inventions for a sufficient amount of time. It puts innovators to the herculean and uncertain task of reviewing their patents that have term adjustments and analyzing whether to disclaim the adjustments entirely to save their patents from invalidation. Given the upheaval caused by the Federal Circuit’s decision, the Supreme Court should take up invalidation of US patents solely based on patent term adjustment. In re Cellect provides the opportunity to do so now.

The lack of Federal Circuit decisions is likely because AIA grace period cases have yet to ripen. President Obama signed the AIA into law on September 16, 2011, with changes to 35 U.S.C. § 102 becoming effective on March 16, 2013, nearly 10 years ago. Meanwhile, the average patent application takes 2.5 years and the average patent infringement suit takes three to five years. Further, parties settle or abandon around 90% of patent infringement lawsuits. Also, patent disputes will not involve grace period exception questions unless the prior art in the case originated within one year of a patent’s effective filing date. However, as pre-AIA patents slowly expire, AIA-based patents will become the focus of all patent litigation, and eventually, a case will arise that requires defining the grace period provisions. In the meantime, the uncertainty of the grace period provisions will cause parties to refuse to settle infringement suits and clog the dockets of federal civil courts.

B. Impact On the USPTO

In the wake of Nken v. Holder, scholars renewed criticisms of the various preliminary injunction standards. At least one scholar has argued that courts should avoid any consideration of the merits of a claim in deciding a motion for equitable relief. They argue that consideration of the merits is ahistorical and—a point with which this Note agrees—leads to unacceptable lock-in bias. It is unclear whether the history of equitable remedies supports consideration of the merits on its own terms—the English Courts which served as models for the American equity tradition had mixed records of considering the merits in their decision-making, and by the mid-nineteenth century a version of the modern likelihood of success on the merits prong had already been integrated into the widely used tests. More to the point, an entirely merits-less test would be out of touch with modern U.S. procedural practice. Preliminary injunctions granted to claimants with no likelihood of success on the merits would bestow a windfall and unjustly punish an innocent nonmovant. Spurious claims would clog courts’ dockets, slowing down the adjudication for those who may not even be parties to the litigation at issue. Threat of irreparable harm, the balance of the equities, and the public’s interest in the litigation, standing alone, are insufficient to manage these efficiency concerns. While overzealous merits predominance may bias the ultimate disposition of a claim, the direct costs imposed by a merits-less test would be just as erroneous. In a litigious society, the lack of a meaningful constraint on motions for preliminary injunctions would surely, unacceptably incentivize vexatious litigation.

D. A Plan Without Merit(s)¶ In the wake of Nken v. Holder,[151] scholars renewed criticisms of the various preliminary injunction standards.[152] At least one scholar has argued that courts should avoid any consideration of the merits of a claim in deciding a motion for equitable relief.[153] They argue that consideration of the merits is ahistorical and—a point with which this Note agrees—leads to unacceptable lock-in bias.[154] It is unclear whether the history of equitable remedies supports consideration of the merits on its own terms—the English Courts which served as models for the American equity tradition had mixed records of considering the merits in their decision-making, and by the mid-nineteenth century a version of the modern likelihood of success on the merits prong had already been integrated into the widely used tests.[155] More to the point, an entirely merits-less test would be out of touch with modern U.S. procedural practice.¶ Preliminary injunctions granted to claimants with no likelihood of success on the merits would bestow a windfall and unjustly punish an innocent nonmovant. Spurious claims would clog courts’ dockets, slowing down the adjudication for those who may not even be parties to the litigation at issue.[156] Threat of irreparable harm, the balance of the equities, and the public’s interest in the litigation, standing alone, are insufficient to manage these efficiency concerns.[157] While overzealous merits predominance may bias the ultimate disposition of a claim,[158] the direct costs imposed by a merits-less test would be just as erroneous.[159] In a litigious society,[160] the lack of a meaningful constraint on motions for preliminary injunctions would surely, unacceptably incentivize vexatious litigation.

As anyone who follows the landscape of patent litigation knows, the Supreme Court’s decision in eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006) was meant for one primary reason—to combat patent asserted entities (PAEs).[1] It is true that prior to the Supreme Court’s decision in eBay, it was rare for a district court to deny a victorious plaintiff a permanent injunction in a patent infringement case. And PAEs knew that and used the threat of injunctive relief—no matter how remote—to extract license agreements. The STRONGER Patents Act introduced now for the third Congress by Senator Chris Coons (D-DE) has provisions that, if enacted, would overturn eBay. Congress at large appears to have no desire to disturb this Supreme Court decision, and any bill that contains a provision overruling eBay cannot and should not be enacted. Such a bill would reopen the flood gates for PAEs to file patent infringement suits in federal district court armed with the threat of injunctive relief. At a time when most policymakers rightly argue that China and other countries need to do more to clamp down on intellectual property infringement, overturning the four-factor eBay v. MercExchange test would impose new hurdles and increase the PAE problem that Congress and the Supreme Court fought to address over the last two decades. Despite the Supreme Court’s decision in eBay, PAEs remain a problem in district court litigation today. In 2013, according to a report by the U.S. International Trade Commission, 60% of all district court patent suits were brought by PAEs. In 2018, that number remained steady with PAEs accounting for 55% of all district court patent suits. See 2018 Patent Dispute Report: Year in Review (Jan. 2, 2019), (last visited Feb. 21, 2020). As correctly noted in Gene Quinn’s February article Why eBay v. MercExchange Should, But Won’t, Be Overruled, the fallout of the Supreme Court’s eBay decision is that the United States International Trade Commission (ITC) has become a far more desirable forum for patent owners. The ITC allows patent owners the ability to obtain an exclusion order that prevents importation into the United States products found to infringe a valid intellectual property right. This provides great relief to complainants who can avail themselves of the ITC’s jurisdiction under Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. First and foremost, Section 337 is a trade statute, and the ITC is tasked with administering enforcement of the statute. The ITC investigates whether there is an unfair act in the importation of products into the United States. Section 337 defines such unlawful acts as, among other things, infringement of a valid patent, copyright, or registered trademark.

The wording of the proposed Intellectual Property Bill should change to prevent unnecessary litigation and protect the rights of designers, experts warn. The bill - designed to simplify and improve design and patent protection, particularly for SMEs - would make it a criminal offence, punishable with up to 10 years in prison, to deliberately copy a registered design. It passed through the House of Lords on Tuesday July 30, 2013 with an amendment to improve defences available to those prosecuted after the bill has passed into law. The proposed amendment includes a clause allowing those accused of infringement to defend their themselves on the grounds that they ‘reasonably believed’ that they had not done so. Patent attorneys Withers & Rogers said this will extend protection to defendants who believe that their own design is sufficiently different to escape infringement. The draft legislation is expected to be debated in the House of Commons later this year before passing into law in 2014/2015. Tony Whitehead, IET policy director and Roger Burt, president of the Chartered Institute of Patent Attorneys agree that current legislation adequately protects against infringements and caution that that the wording of the bill has the potential to create numerous infringement claims. ‘Blatant copying of registered designs is reprehensible,’ Whitehead said via email. ‘However, if the government is determined to tighten up the legal consequences…then it needs to be done in a way that does not clog-up the legal system with hundreds of cases against designers and retailers who have followed fashion trends but have not deliberately copied registered designs. Nor must it stifle innovation because of fear of prosecution for presumed copying. It is for these reasons that the language of the Intellectual Property Bill needs amending.’ Whitehead added that most product designs are not registered and that the majority of SMEs and design sole-traders do not have the funds to pay for design registration as they compete in fast moving markets. The Intellectual Property Office says the proposed new criminal sanction for breach of registered design rights is focused on ‘wrongful business behaviour’ and that the law will not persecute those who inadvertantly infringe a design. In a statement Phil Sanger, Withers & Rogers said, ‘Assuming this amendment is included in the final legislation, it will remain important for businesses…to be diligent and obtain an objective, professional opinion on whether their proposed activity would constitute an infringement.’

Over the past 20 years, the overall number of intellectual property cases filed in the U.S. courts has increased dramatically. However, after sharp increases in the early 2010s, patent infringement case filings now have started to fall, copyright case filings have fluctuated, and trademark case filings have held steady. Most intellectual property cases are concentrated in a handful of states.

¶ ¶ Time Consumption¶ IP litigation is also typically a lengthy process. Cases can take 2-5 years or more to make their way through discovery, pretrial motions, trial, and appeals. This long timeline requires an ongoing time commitment to meet with attorneys, review and respond to motions, sit for depositions, and possibly testify in court. For a small company, the time required can be a major burden.¶ Uncertain Outcome¶ There is always a risk that you may not prevail in litigation, even if you believe you have a strong case. The inherent uncertainties of the litigation process, including the difficulties of predicting how judges and juries will view the evidence and apply the law, mean that the outcome is not guaranteed. Losing a case could mean losing important IP rights and competitive advantages. The possibility of an unfavorable outcome should be weighed carefully against the potential benefits of litigation.¶ Damage to Business Relationships¶ Engaging in adversarial litigation against another party can often damage business relationships and create ill will. This is especially true if the other party is a competitor, customer, or supplier. While protecting your IP rights is important, litigation may not always be the best strategy and should be considered carefully based on your overall business interests. Alternative dispute resolution methods like mediation may be preferable in some situations.¶ Conclusion¶ In summary, intellectual property litigation can be a complex process that requires careful planning and execution. As the plaintiff, you must establish that your IP rights have been infringed upon and that you have suffered damages as a result. The defendant will aim to prove that no infringement occurred or that your IP rights are invalid.¶ Throughout the pre-trial and trial phases, you must build a persuasive case supported by concrete evidence of infringement and quantify the economic harm you have incurred. You should work closely with IP litigation counsel to determine the best legal strategies based on the facts of your specific case. While the litigation process can be lengthy and expensive, protecting your intellectual property rights is crucial to sustaining a competitive advantage and continued success in the marketplace.¶ With thorough preparation and the advice of experienced IP counsel, you can significantly improve your chances of a favorable outcome at trial. However, there is always a possibility of an unfavorable verdict. You should go into the litigation with reasonable expectations about potential outcomes and be prepared for either result. The key is to approach each stage of the process systematically, paying close attention to details and avoiding missteps that could weaken your case.

Over the past 20 years, the overall number of intellectual property cases filed in the U.S. courts has increased dramatically. However, after sharp increases in the early 2010s, patent infringement case filings now have started to fall, copyright case filings have fluctuated, and trademark case filings have held steady. Most intellectual property cases are concentrated in a handful of states.

U.S. patent litigation is big business. Billion-dollar judgments, readily available litigation financing, and favorable venues and lax filing standards mean between three and four thousand suits are filed annually, almost none going to trial. As is standard today, the true identity of the entity filing suit is often shrouded in secrecy; rules and regulations associated with tax status and corporate formation—in addition to making patent litigation more profitable—make it favorable to create straw-man shell corporations (also known as non-practicing entities (NPEs) in legal jargon) for use as judgment-proof vehicles to sue. And the lawyers, of course, make a killing. For the NPEs that use a “file-and-settle” model, filing hundreds of complaints (and sending even more demand letters per year) and obtaining quick settlement, often for less than the cost of litigation, is critical—if problematic for the lawyers pushing hundreds of cases a year. This practice, if taken to the extreme (as some have), is bound to violate ethical and court rules, like those of reasonable pre-suit investigation, diligence, and the prohibition against filing frivolous suits. That’s why just a handful of lawyers are willing to risk it. These lawyers and their filings are rarely reviewed—particularly because these cases settle so quickly that not even court clerks, much less magistrates or District Court judges, generally get to lay eyes on them before they are withdrawn or settle for nuisance value (typically less than $30,000, and by some reports often as little as a few thousand). In this cottage industry representing more than 1,000 patent suits a year—over a fourth of all filings per annum—the entities are represented by a handful of lawyers, suing roughly 50 U.S. companies a month, never (as in, not once in the approximately ten years this practice has been prevalent) going to trial. Small companies dominate the target list, including, start-ups, retailers, and others not versed in defending against these actions. It’s so many suits that these lawyers literally do not have the time to conduct reasonable pre-suit diligence on even a fraction of their filings. Exhibit A of this phenomenon is William (“Bill”) Ramey III. He has filed over 300 suits this year alone (through October), almost exclusively in the Western District of Texas’s Waco division; in the past ten years, he’s filed thousands. A former drunk-driving billboard defense lawyer, he’s moved into Waco and is driving the heavy filings there. Some of the subsidiaries he files for include AML IP LLC, Authwallet LLC, Cybersoft IP LLC, and PacSec3, LLC, to name a few, each of whom have filed against dozens of defendants or more. This high-volume practice has led to a panoply of sanctionable conduct. See Traxcell Technologies, LLC v. Huawei Technologies USA Inc., 2-17-cv-00042 (EDTX) (fining counsel $65,000 and imposing numerous evidentiary sanctions); WPEM, LLC v. SOTI Inc., 2020-1483, 2020 WL 7238458, at *1 (Fed. Cir. Dec. 9, 2020) (Gilstrap, J., below) (sanctioning counsel for lack of pre-suit investigation); NetSoc, LLC v. Chegg Inc., No. 18-cv-10262 et al. (S.D. NY Dec. 10, 2020) (filing included numerous typographical errors in unproofed claim charts, such as incorrect patent numbers and apparently cut-and-paste-induced errors; when confronted with these obvious errors in the pleading in at least three cases (and by counsel), Mr. Ramey apparently took over three months to address them, enough that the case was deemed exceptional under Octane Fitness.). What is also worth noting is, according to Docket Navigator, of the 39 times this counsel reached a decision on the merits before a court at his current self-run firm—e.g., motions to dismiss, failure to state a claim, ultimate judgment—he lost each one. And they have further sanctions motions pending. See, e.g., ZT IP, LLC v. VMware Inc., No. 3:22-cv-00970, ECF 39 (ND Tex) (scheduling oral argument on exceptional case and attorney’s fees). There are others, too—like Landmark Technology A, LLC, responsible for 1,800 demand letters and dozens and dozens of lawsuits, all demanding $65,000 to license, to “every kind of business under the sun” other than financial institutions themselves, including bakeries, florists, pharmacies, jewelers, bookstores, and other storefront businesses, on a patent ostensibly related to “loan processing and credit reporting.” See State of Washington v. Landmark Technology A, LLC, No. C21-728RSM, ECF 35 (W.D. Wash. Oct. 28, 2022) (noting that eleven parties have, to date, filed for declarations of non-infringement, and noting that business have settled for “payment of licensing fees between $15,000 and $20,000 each”). Others—DynaIP, IP Edge, and other groups of subsidiaries—together file upwards of 1,000 suits a year. And Equitable IP, IP Investments, Dominion Harbor, and other frequent filers round out the list, some of which may have less questionable or more a legitimate volume of filings or licensing strategies, or at least capable counsel conducting the required pre-suit diligence. And IP Edge, another frequent filer controlling hundreds of subsidiaries, uses Bill Ramey for some of their filings. In another example, entities apparently backed by Raymond Anthony Joao—who was himself famously sanctioned $1 million for actions by a subsidiary in a decision upheld on appeal (see https://www.law360.com/articles/778961/patent-owner-must-pay-1m-in-fees-for-its-tortuous-suit)—recently filed many dozens of suits, many, under the Decapolis Systems, LLC name, against Texas healthcare practices, universities, municipalities, and the like. See, e.g., Decapolis Systems, LLC v. UT Southwestern Health Systems et al., 2:22-cv-00159 (E.D. Tex.); Decapolis Systems, LLC v. Texas Retina Associates et al., 2:22-cv-00173 (E.D. Tex.). Judge Albright in Waco recently transferred some of those cases that hung around long enough to get to a ruling out; their pleadings showed no real ties to Texas, as he noted. See, e.g., Decapolis Systems, LLC v. eClinicalWorks, LLC., 4:22-cv-40020, ECF 30 (D. Mass). Another, Hawk Technology Systems, sued hundreds, including Goodwill franchises, school districts, and hospitals on a single old CCTV patent both difficult to read and vague in its claims. See, e.g., Hawk Technology Systems v. DeSoto County School District, 3:18-cv-00132 (N.D. Miss); Hawk Technology Systems v. Goodwill of Silicon Valley, 3:16-cv-06213 (N.D. Cal.); Hawk Technology Systems, LLC v. Greater Baltimore Medical Center, Inc., 1:16-cv-01284 (D. Md.). Many of the complaints look deficient on their face; some contain typographical or cut-and-paste errors or allegations that, again on their face, are simply not credible. There are others, some who have filed so many complaints in such a short amount of time, it’s hard to keep track. Shipping and Transit, LLC—an NPE formed by the same people and asserting some of the same patents as the infamous ArrivalStar campaign—conducted a litigation campaign that sent more than a thousand demand letters and filed over six hundred and fifty lawsuits against small companies, mostly just small companies with a website, like CD Universe, a company owned and employing a single person, which resold CDs on a website. Defendants were sued for using tracking widgets from third party shippers like FedEx, and asked to settle for less than $50,000 (often much, much less). A few defendants fought back, pouring thousands in legal fees into chasing Shipping and Transit down for sanctions and fees, which they got, but not until after the entity had made its money and filed 650+ complaints. For instance, in Shipping and Transit, LLC v. Hall Enterprises, Inc., No. 16-cv-16535-AG-AFM (C.D. Cal. July 5, 2017), the defendant was awarded attorney’s fees under 35 U.S.C. Section 285. The Hall Enterprises court relied on SFA Sys., LLC v. Newegg, Inc., 793 F.3d 1344, 1349 (Fed. Cir. 2015) (holding that patent plaintiff’s sue-and-settle litigation business model relevant to determining whether case is “exceptional” under Section 285). Shipping and Transit offshored most of the licensing revenue obtained, later declared bankruptcy, and valued their entire patent portfolio at $1. Perhaps the attorneys partaking in the file-and-settle model should simply be reminded, again, of their ethical and legal obligations. For instance, as patent practitioners, 37 C.F.R. Section 11.301 states that a practitioner “shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous. Other sections prohibit undue delay in proceedings before a tribunal, prohibit the making of false statements of fact or law to a tribunal, the failure to disclose to a tribunal legal authority in the controlling jurisdiction known to the practitioner to be directly adverse to the position of the client and not disclosed by opposing counsel, and the knowing offer of false evidence. Additional sections govern fairness to opposing counsel and parties and conduct involving dishonesty or fraud, among other restrictions. The Courts have analogous regulations, as well as FRCP Rule 11, and each state Bar has ethical rules. But these attorneys and companies have been reminded, repeatedly, and it has neither slowed down their practices nor resulted in any obvious change in behavior. What is needed, then, is some more comprehensive inquiry into the speed and volume of their practices. Barring intervention from the Court or a third party, some other, more comprehensive guidance on ethical conduct in patent cases or some more effective sanction would be needed. Otherwise, it’s time for the patent bar and state bars to take notice.

For the past several decades, appellate judges and court scholars have struggled with the existence of, and potential responses to, an overwhelming predicament: the growth of the federal appellate caseload has far outpaced the growth of the federal appellate judiciary. 1 The average annual filings per active judgeship stood at 73 in1950, 2 jumped to 137 by 1978, 3 and hovers around 330 today 4 —even though the number of judgeships has nearly tripled in that time. 5 No wonder then that the phrase “crisis in volume” was coined, 6 and is now commonly used, 7 to describe the workload of the federal courts of appeals. To cope with their expanding caseload, appellate courts have adopted a wide array of case management techniques. 8 These include holding oral argument 9 and publishing opinions in a smaller percent- age of cases, 10 and having staff attorneys prepare dispositions in a larger percentage of cases. 11 Although specific practices vary considerably from circuit to circuit, 12 their animating rationale is the same: to keep the courts running, some sets of cases must receive considerably less judicial attention than others. 13

The world’s courts and judicial systems are reacting to the outbreak of the novel coronavirus (COVID-19) in broadly different ways, presenting litigants with a range of conflicting situations and advice. In some jurisdictions, litigation has essentially frozen: The courts are closed, limitation and prescription periods are suspended and times for appeal have been extended. In other jurisdictions, the courts remain more or less open (albeit with most or all hearings conducted remotely) and time continues to run. This article compares the impact of these measures on current and future disputes involving tax, trusts and estates and family business disputes in the United States, England and Wales, and offshore. ILLINOIS: As most of Illinois (outside of Chicago) began a staged reopening on May 29, 2020, the Illinois Supreme Court has ordered that “Effective June 1, 2020, the Court’s order of March 17, 2020, is modified so that each circuit may return to hearing court matters, whether in person or remotely, according to a schedule to be adopted for each county by the chief judge in each circuit. The circuit courts shall continue, to the extent possible, to allow for appropriate social distancing and attempt to reduce the number of persons appearing personally for court appearances.” (Illinois Supreme Court Order M.R. 30370, entered May 20, 2020.) As of June 1, 2020, each of the 24 Illinois Circuit Courts is issuing its own orders regarding procedures for reopening courtrooms. These orders vary widely. For example: On May 28, 2020, the chief judge of the Circuit Court of Cook County issued an amendment to General Administrative Order 2020-01 extending the closure of almost all civil courtrooms until July 6, 2020. Pursuant to G.A.O. 2020-01, hearings in almost all civil matters scheduled prior to July 6 are continued at least 30 days (to a date not more than 30 days after July 6); the Circuit Court of Cook County has limited ability to hold remote hearings by video or telephone conference. E-filing is required (as it was prior to the pandemic), and filing deadlines are not extended. By contrast, on the same day, the chief judge of the Circuit Court for the 3rd Circuit in southern Illinois (Madison and Bond Counties) issued Administrative Order 2020-M-14 reopening all courtrooms “for limited court business” effective June 1, 2020. Everyone entering the courthouse is required to wear a mask, and each courtroom will operate on a separate schedule set by the respective judge. The three US District Courts in Illinois each have their own orders governing practice and procedures during the pandemic; none of them have reopened their courthouses for non-emergency civil cases. In the Northern District, the Fourth Amended General Order 20-0012 issued May 26, 2020, directs that civil hearings are to be conducted remotely, by video or telephone conference, through July 15, 2020, and no civil jury trials will be conducted before August 3, 2020. In the Central District, Third Amended General Order 20-01 extends the closure of courthouses through June 15, 2020, while in the Southern District, courthouses will remain closed except for special settings through July 5. Unlike some of the previous orders in the US District Courts, none of the latest orders extend filing or other deadlines in civil cases. None of the District Courts in Illinois have released plans for a general reopening of their courthouses. NEW YORK: New York state courts began the pandemic closed, except for essential applications, and are slowly opening back up, each in different ways and at a different pace. Litigants can now e-file documents, including to commence new cases, which they could not do previously. For cases commenced pre-COVID, case management depends largely on the court, the case and the judge. However, generally speaking, response deadlines are stayed in the lower courts. Statutes of limitations remain tolled by Executive Order. Courts have been holding appearances, including oral arguments, by video, with increasing frequency, though pre-scheduled routine appearances are often adjourned sine die, unless specifically requested by a party. Many courthouses are beginning to open for in-person operations, depending on the region and in accordance with Governor Cuomo’s phased reopening plan. The reopening of electronic filing led to a heavy influx of new cases and other filings, which created an immediate backlog, but resulting delays may be minimized by the fact that the courts used the “time out” to clear the pre-COVID case backlog. US TAX DISPUTES: Federal tax disputes are heard initially in the US Tax Court, the US Court of Federal Claims or the US District Courts, and on appeal in the federal appeals courts. The Tax Court is the only pre-payment forum where taxpayers may dispute a liability asserted by the IRS, with the Court of Federal Claims and the District Courts limited to hearing refund suits after a taxpayer has paid in full. The Tax Court is headquartered in Washington, DC, but typically conducts trial sessions in 74 cities across the country. The Tax Court cancelled upcoming trial sessions as of March 11, 2020, and closed its building on March 18, 2020. The building remains closed and all trial sessions through June 30, 2020, are cancelled. On May 29, 2020, the chief judge issued Administrative Order No. 2020-02, Remote Court Proceedings During COVID-19 Pandemic. Until further notice, all proceedings of the Tax Court will be conducted remotely and public access to the remote proceedings will be available via real-time audio. The Tax Court’s ability to function remotely, however, is limited by one critical rule: All petitions to initiate a case must be filed on paper with the clerk’s office, which then serves IRS Chief Counsel. With the building closed and no mail being delivered, petitions sent to the court have either been returned to the sender or held, creating a large backlog of unopened cases. Given its commitment to functioning remotely for the foreseeable future, the court will likely modify the procedure for initiating a case or develop a system for receiving and processing its mail in the very near future. The Court of Federal Claims, also located in Washington, DC, restricted access to its courthouse until further notice and entered an order on March 16, 2020, directing that all proceeding scheduled to occur before June 15, 2020, would be held by telephone or video conference unless the chief judge granted express permission. There is no general order extending deadlines. The statuses of the US District Courts and the federal appeals courts vary dramatically because they are located across the country and the courts are individually coordinating with state and local health officials. Both the District Courts and the federal appeals courts handle civil and criminal cases and must be sensitive to the rights of criminal defendants to a speedy trial and timely appeal. The District Courts in particular face the additional challenge of jury trials. In cities where the pandemic has presented the greatest dangers, civil litigants should expect cases to be handled on paper or through remote hearings for quite some time as courts seek to limit the number of people in the courthouses and prioritize criminal hearings. ENGLAND, WALES AND OFFSHORE: By contrast, the majority of courts remain open for business in England and Wales, albeit remotely. This has been driven largely to avoid a backlog of cases and to ensure continuity of access to justice. Consequently, limitation periods have not been suspended and it is highly unlikely that the courts will retrospectively resurrect time-barred claims because of delays caused by the pandemic. E-filing is largely available in civil courts, and rules have been relaxed to allow parties to agree extensions to filing deadlines for up to 56 days without court approval. The Lord Chief Justice also announced in March 2020 that the default position during the pandemic is that hearings should be conducted remotely if possible. The judiciary has moved quickly to embrace technology and published guidance on when and how remote hearings should operate. Adjournments to permit “in-person” hearings/trials will only be granted if the judge is satisfied that there will be real prejudice to one or all parties (e.g., IT issues or illness). In practice this means that parties will need to adapt to conducting hearings and trials remotely for the foreseeable future. Courts in key offshore jurisdictions have also largely remained in operation over this time to deal with urgent business, following short temporary closures at the beginning of the pandemic. Many offshore jurisdictions have temporarily allowed electronic filing and have introduced remote hearings. However, unlike England and Wales, many offshore jurisdictions have encouraged parties to adjourn non-urgent hearings and have generally adjourned trials until such time as they can resume in physical court. On the whole, limitation periods continue to run in offshore jurisdictions except for the Bahamas (where limitation periods are suspended until 30 days after emergency measures are lifted). SUMMARY: As governments ease lockdown measures begin to ease in their jurisdictions, the judicial systems are slowly reopening and various measure are being put in place to allow “in-person” hearings to resume safely. Court users can expect that courts will impose social distancing measures, compulsory wearing of masks and temperature checks as the norm. Much of the guidance published in these jurisdictions since the beginning of the COVID-19 pandemic has already been updated or replaced. As the situation shifts and government advice changes, so will the response of the courts. As a result, all parties in the midst of court proceedings should ensure they stay up to date with the various pieces of guidance issued by courts in their respective jurisdiction

While the COVID-19 pandemic does not appear to have had much of an effect on new lawsuits, it did impact how pending cases proceeded. Many courts called off jury trials in 2020 and 2021, which may have led to fewer decisions that could be appealed last year, attorneys said. "During the pandemic, case schedules were frequently extended far beyond typical case durations, and meanwhile, many cases settled that otherwise might not have," said Paul Schoenhard of Fried Frank Harris Shriver & Jacobson LLP. "As a result, I don't find it particularly surprising that the number of new appeals was down." As trials have begun to ramp back up, judges may now be facing a higher than usual number of motions for summary judgment and post-trial briefing that they have yet to rule on. The courts "did a heroic job during COVID to keep the trains running on time," said Michael Lindinger of Mayer Brown LLP. "But I think the busier patent courts are probably still digging out of a lot of backlog." As judges work their way through that, "it'll take a couple years, but [appeals] will probably come back to where those numbers used to be," he said. The busier patent courts have certainly stayed busy. According to the report, from 2020 to 2022, three courts heard more than 53% of all patent cases: the Western District of Texas, the District of Delaware and the Eastern District of Texas. The Western District of Texas was the most popular patent court over the three-year period, with 2,711 cases, compared to 2,286 in Delaware. Waco-based Judge Alan Albright, a former patent litigator who has encouraged plaintiffs to file suits in the Western District of Texas, has driven a significant number of cases there. Yet the number of cases filed in the Western District of Texas dropped from 981 in 2021 to 867 in 2022. That may be due to new rules the district implemented in July that call for patent cases filed in Waco to be randomly assigned to judges instead of automatically going to Judge Albright as they did before, a change that is still playing out. Even so, because a large number of patent lawsuits are against technology companies, and many of those businesses have a presence in the Western District of Texas and can be sued there under the Supreme Court's venue ruling, the district will likely continue to be an important part of the patent map, Mayer Brown's Lindinger said. "I think the Western District is going to continue to be an attractive venue to file patent cases, even if some of them ultimately do get transferred. There are so many tech companies down there," he said. Patent plaintiffs continue to gravitate toward the same few courts because they are known quantities at this point, according to Balich of Wolf Greenfield. "Plaintiffs are looking for certainty and predictability, and anytime you have a district that is very familiar with patent litigation and has set rules on how it's going to play out, you achieve that predictability, and in some sense, that can be more important than anything else," he said. While patent suit filings dropped slightly overall, the number of patent infringement suits over abbreviated new drug applications, or ANDAs, for generic drugs ticked upward slightly in 2022 to 264, the report found. That was only 10 more than the 254 filed in 2021, but the increase stood out since ANDA cases had previously fallen every year since 2017. The generic drug industry is unique in that it almost requires patent litigation before a product enters the market, so "the number of ANDA cases has more to do with the number of new drugs coming out onto the market than anything else," Balich said. The report also identified the most prolific patent plaintiffs from 2020 to 2022, a list that was dominated by patent licensing companies. At the top was a company called Cedar Lane Technologies Inc., which filed 336 suits over the three-year period, including 176 in 2022, predominantly over computer imaging patents. In second place was WSOU Investments LLC, which filed 205 suits involving wireless communications patents over the three years, although the bulk of them were filed in 2020. The next place on the list was taken by Bell Semiconductor, which filed 106 suits over circuit patents, nearly all of them in 2022. The report's list of the companies sued most often over the past three years was led by the biggest names in technology: Samsung, Google, Apple, Microsoft and Amazon.