U.S. patent-infringement lawsuits against multiple defendants surged as much as 10-fold in the past week, targeting companies including Apple (AAPL) and Google (GOOG) ahead of a new law that would make such cases costlier.
At least 31 lawsuits with more than one company listed as a defendant were started in the three days through Friday, mostly brought by so-called non-practicing entities, according to an analysis by Craig Smith, a patent lawyer at Lando & Anastasi in Cambridge, Mass. Of those cases, 16 target more than 10 companies in a single suit including Apple, PepsiCo, Google, Target and Samsung Electronics.
"Typically, you'd see three multidefendant cases in a day, and only occasionally you'd see ones with more than 10 defendants," Smith said in a telephone interview.
President Barack Obama is set to sign legislation passed by the Senate on Thursday that would mark the biggest change to U.S. patent law since at least 1952. The America Invents Act includes a requirement that defendants must have commonality in order to be sued collectively, a move aimed at curbing lawsuits from NPEs that have no operations other than acquiring
The provision is likely to force patent owners to file individual lawsuits and manage the increased cost of scheduling multiple trials or negotiations.
"It's a lot more onerous for the trolls to deal with 30 lawsuits than one lawsuit," said Brad Wright, a patent lawyer with Banner & Witcoff in Washington, using a pejorative for NPEs. "That's why they're rushing to sue right now."
Apple and Google have each been named in at least five of the lawsuits from last week, while Samsung has been named in four. Most of the multidefendant suits have been filed in the Eastern District of Texas federal court, a popular venue because it's considered to be faster and friendlier to patent owners.
"As is becoming clear, the increase in patent litigation in the technology industry is a growing drag on innovation," said Jim Prosser, a spokesman for Mountain View-based Google.
Closely held TQP Development, owner of a patent for a modem to send encrypted data over telephone lines, filed a suit that named Caterpillar, PepsiCo and General Electric, and another against airlines and booking agencies including US Airways and Priceline.com.
The lawyers for TQP and Droplets didn't immediately return messages seeking to discuss the suits and the new provision.
The provision regarding the number of defendants in a case goes into effect as soon as the bill is signed into law and only affects cases started after that, said Wright, who wrote a report on the timing of different parts of the legislation.
For a patent owner, filing a single suit is more efficient if it involves the same patents. A single judge is assigned and handles all pre-trial proceedings such as the interpretation of disputed terms within a patent.
The provision is just one line of a bill that covers more than 150 pages, revamps the patent application process, gives the U.S. Patent and Trademark Office more authority over its budget and creates a program to challenge newly issued patents.