An important new working paper by Illinois Professor Jay Kesan and PhD candidate Gwendolyn Ball presents a statistical analysis of the resolution of patent cases. This type of data can be very useful when planning expected litigation costs and predicting settlement behavior. The paper, entitled How Are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes, is available through the SSRN website.
- The rule of thumb is correct that 5% of cases go to trial.
- The rule of thumb that 95% settle is not correct — this ignores the fact that “8–9% of cases are terminated through final rulings on a motion for summary judgment.” This means that the real battle in most patent cases revolves around establishing a strong position early in the game.
- The figure below is one of a number of examples from the paper — this one shows the total pendency of cases filed in 1997 that were eventually adjudicated (rather than settled).
- Because of the time-lag of patent cases, the authors used 1995 and 1997 data. It is unclear today how things have changed today. Although Professor Kesan reports that they are working on 2000 data, and that anecdotal evidence continues to indicate that summary judgment is as important as ever.
- The statistical significance of the study is also unclear.