From Pi to Ip: Yet Another Unexpected Effect of Tort Reform

Abstract: Is there a connection between state-law tort reform and the explosive growth of U.S. intellectual property (IP) litigation? The literature has established that the number of tort claims in states with tort reform has gone down. How do personal injury (PI) plaintiff lawyers deal with decreased demand for their services? How do district court judges respond to the lightening of their dockets due to the reduction in tort suits? There is anecdotal evidence that some PI lawyers have switched substantially to IP and that some judges have found ways to attract IP litigation instead of PI litigation. Using data gathered from various sources, including Lex Machina, DocketX, and the Database of State Tort Law Reforms, we have found evidence associating state tort reform with significant increases in copyright and patent filings in U.S. district courts in states that have undergone tort reform. We explore two competing hypotheses for this phenomenon. The “retooling” hypothesis suggests that PI attorneys moving into other areas of practice are more likely to gravitate toward patent litigation and copyright litigation, rather than trademark litigation or trade-secret litigation, perhaps because patent litigation and copyright litigation offer more opportunities for lucrative suits brought by non-incumbent industry players (e.g., independent inventors or startup firms) who might be most likely to seek the services of former PI attorneys. Alternatively, the apparent differential growth of patent and copyright litigation in states that have undergone tort reform might be court-based. In the “vacuum” hypothesis a post-reform decrease in docket congestion creates a “vacuum” that could make a state’s U.S. district courts significantly more attractive for IP filings, either directly by making litigation in those courts speedier or indirectly by freeing time for the courts to adopt rules for IP litigation that parties find attractive.