Status quo shows increase in NPE suits

[AON, risk and human capital firm, 7-18-23, AON, “How Current IP Patent Litigation Trends are Changing Risk Exposures,” , accessed: 7-11-24, ES]

2. There’s a Shift Toward NPE Suits

While the number of lawsuits may have fallen, there has been a marked shift in the type of litigant. In the world of IP, a non-practicing entity (NPE) is a party that holds a patent for a product or process but does not produce the product. Since 2018, there has been a rise in the proportion of cases filed by NPEs. In 2022, NPEs filed 63 percent of cases, the highest percentage of NPE suits since 2015. In H1 2023, roughly 51 percent of cases were filed by NPEs, which is significantly higher than the proportion of NPE suits in H1s over the past 10 years3.

Competitor interests in a business’s IP are typically well known, and associated risks can be managed in many ways — from building a defensive patent portfolio to pursuing insurance, to name a few. But litigation stemming from NPEs is harder to predict and manage. Roughly half of all suits filed by NPEs target technologies outside of a company’s core business. Organizations are facing new pressures to address changing exposures in their risk management strategies.