COVID-19: How Economic Bust Could Lead to IP Litigation Boom

• Patent litigation isn’t slowing down yet, and could soon be booming.

Kao and Tucker noted that patent filings are  up slightly year-to-date, possibly signaling the reversal of a years-long slide. “Insolvency is like a catalyst for nonpracticing entities,” Tucker said. “You’re going to see a lot of patent assets unloaded by your competitors.”

“And those are going to get picked up by non-practicing entities, and there’s gonna be a wave of NPE suits in the future,” Tucker added.

• We may be inhabiting a giant petri dish of trade secret litigation.

“With everybody working from home, there is a lot more potential for cybersecurity issues,” Kao said. Plus, companies are being forced to lay off employees. Some may possess confidential technical or business information. “There is an opportunity for those employees to take information to try to benefit themselves and another company.”

“It’s more critical than ever to ensure the recovery of intellectual property as part of termination procedures,” Kao added.

• Patent prosecution tends to be cyclical, but not so far in this downturn.

“I thought I was going to get a break and I’m not,” Tucker joked. His theory is that innovators are finding more time to spin out their ideas. “Often, one of the biggest barriers to getting a patent is getting your inventors to sit down and write something out,” he said. Tucker advises companies that in a stormy economy, “even an informal provisional (application) is dramatically better than not filing at all.”

• Video-conferenced hearings may be here to stay.

“Judges are quickly getting accustomed to telephonic and video-conferenced hearings,” Kao said.  He expects those to stick in some courtrooms post-pandemic, especially for routine status conferences and case management conferences. “Having people be able to do those remotely rather than needing to fly around the country, I think will become a new normal and will be helpful for all of us,” he added.

• The uptick in motions decided on the papers might have staying power.

“The downside I think to our profession of this new normal is it really takes away opportunities for junior attorneys to get court experience in arguing motions,” Kao said. “Particularly with discovery motions that we would normally have more junior attorneys argue, if those all get decided on the papers, I think that’s a negative impact for the legal profession.”