Patent Litigation

Another shift in favor of patent holders has been the increased availability of patent litigation funding.  Due to its expense, patent litigation has been referred to by some as the “sport of kings.” We have also heard patents referred to as a “cheap gun with very expensive bullets,” although we know many might disagree with how “cheap” the gun is. Although some law firms have taken cases on contingency, most firms have been unwilling and/or unable to take on the risk involved if their client does not prevail. 

Patent litigation funders basically fund the expenses and often some amount of attorney’s fees in exchange for a percentage of the damages recovered in the case. In recent years, litigation funding has allowed many patent cases to be brought which otherwise could not have been. However, with the number of cases that patent holders want to bring, funders can be quite selective, seeking to focus on big ticket cases with multiple patents and very significant damages awards.  Because of the financial risk inherent in contingency cases, funders typically have rigorous vetting processes and will drill down into the infringement evidence, claim construction arguments, and the prior art. If your patent squeaked by during prosecution, or if you are really threading the needle to develop an infringement position that squares with the prior art, you may not have an easy time getting the case funded. However, if your patent received a fairly thorough examination, and your infringement positions align well with the positions you took in the Patent Office, litigation funding may be a viable option.