1. IP Litigation Trends in United States District Courts: 1994—2014 … Regional Variation Professor Matthew Sag Loyola University of Chicago School of Law September 20, 2014 Please visit www.matthewsag.com or email matthewsag@gmail.com for a copy of these slides or the underlying data for replication. Working paper available soon at www.ssrn.comwww.matthewsag.commatthewsag@gmail.comwww.ssrn.com

2. Substantial regional variation in rates of IP litigation Instability/Stability in regional allocation Importance of economic factors Differences between copyright, patent and trademark Idiosyncratic factors E.g. Copyright John Doe litigation? Righthaven LLC in Nevada in 2010 Forum selling by the ED Texas in patent law

3. StateIP casesCopyrightPatentTrademarkGDPPop.GDP PP California11111111 New York2242336 Texas33242215 Florida44634438 Illinois56555513 Pennsylvania65976629 New Jersey78768117 Delaware84233341451 Michigan97889836 Ohio10912107731 Table 4: Top 10 States for IP Litigation, with Subject Area and State GDP and Population Rankings At the state level things mostly make sense

4. We can drill into a lot more detail on the district level – Trademark and Copyright ranks generally correlate – Patent ranks generally correlate with (copyright+trademark) Worth thinking about why some districts are copyright/patent/trademark heavy

5. Figure 5 District Rankings, Copyright Compared to Trademark (2004-2014)

6. Figure 6 District Rank in terms of Patent versus Copyright and Trademark Combined (2004-2014)

7. Figure 7 District Court Ranks for Patent Litigation 1994-2014

8. THE ROLE OF THE LOCAL ECONOMY IN FEDERAL INTELLECTUAL PROPERTY LITIGATION Part IV

9. Analyzing quarterly patent filings from 1971 to 2009, Alan Marco, Shawn Miller and Ted Sichelman (“MMS”) find that economic downturns have a counter-cyclical impact on the initiation of patent litigation. [A] 1% increase in GDP leads to a 5% decrease in patent litigation four quarters later in the earlier sub-period [1971-1991] and a 6% decrease two quarters later in the later sub-period [1986-2009].

10. Figure 8 Panel Data on State GDP and Filings

11. Independent Variables (1) All IP Cases(2) Copyright(3) Patent(4) Trademark Real GDP.0003** (0).0003** (0).0002** (0).0004** (0) Change in Real GDP 1.3958** (.4789) 1.756* (.8448) 1.1137 (.8253) 1.2591 (.7338) GDP Per Person.0004* (.0002) –.0003 (.0002).0016** (.0005).0001 (.0001) GDP (ITC).0009** (.0003).001* (.0005).0011** (.0003).0005 (.0003) Year –.9716** (.3071) -.5287 (.5721) –1.12 (2.47) -.09 (.33) Circuit.7008 (.3739) -.2658 (.7854) –9.35** (2.65).17 (.38) Nature of Suit.71** (.1521) Constant1310.34* (615.64) 1040.12 (1144.86) 721.95 (1187.66) 3971.08** (790.27) N2044697675690 r-squared.78.72.78.88 Regression Results Linear Regression with State Fixed Effects DV Cases Filed

12. Variables that ‘predict’ IP litigation Real GDP (wealth) – All models Change in Real GDP (growth) – All IP & Copyright. – Not in Patent or Trademark (but are significant without SFE) GDP per person is negative – All IP & Patent. – Not in Copyright or Trademark – (Trademark and Patent were negative and significant without SFE) Real GDP in the Information Technology and Communications Sector – All, Copyright & Patent. – Not in Trademark

13. Independent Variables (5) All IP Cases(6) Copyright(7) Patent(8) Trademark Real GDP 0 (0) 0 (0).0001 (0) 0 (0) Change in Real GDP 1.98** (.69) 4.46** (1.63).77 (.84).86 (1.05) GDP Per Person –.0008 (0) --.0013 (0) –.0014 (0).0005 (0) GDP (ITC) –.0001 (0).0005 (0) –.0009 (0).0002 (0) Year.63 (.76) 1.89 (1.7).74 (1.22) –.73 (.95) Circuit -2.31 (2.51) -.35 (2.97) -3.76 (6.46) –2.86 (2.85) Nature of Suit –.76** (.24) Constant –565.17 (1506.35) –3730.4 (3341.38) –1364.29 (2399.94) 1477.71 (1878.65) N2477820819838 r-squared.03.05.06.05 Regression Results Linear Regression with State Fixed Effects DV Change in Cases Filed

14. Change in cases filed – Significant Change in Real GDP – for All and Copyright – Not Patent & Trademark – Not significant Real GDP GDP Per Person ITC GDP

15. Independent Variables All IP Cases 1 year lags All IP Cases 2 year lags All IP Cases 1 & 2 year lags Real GDP (1 Year Lag).0003** (0).0014** (0) Real GDP (2 Year Lag).0003** (0) -.0012** (0) Change in GDP (1 Year Lag) 1.58** (.54) -.87 (.58) Change in GDP (2 Year Lag).36 (.6) -.57 (.51) ICT GDP (1 Year Lag).0008 (0).003 (0) ICT GDP (2 Year Lag).0008 (0) -.0022 (0) Year Filed -1.83** (.37) -2.24** (.41) -1.71** (.43) Circuit.6 (.51).79 (.53).87 (.52) Nature of Suit.55** (.15).49** (.15).49** (.15) Constant 3177.62** (732.52) 4049.37** (826.19) 2997.87** (868.39) N 24692326 r-squared.65.64.65 Regression Results, Linear Regression with State Fixed Effects DV Cases Filed, Lagged GDP Variables