Patent Infringement Litigation Financing

Patent Litigation Financing

When your patent has been infringed, there are no “patent police” you can call. Patent enforcement is a civil matter. That means you need to engage a patent litigation law firm and sue each infringer for patent infringement in U.S. District Court.

Unfortunately, patent infringement litigation is quite expensive. Filing and trying a patent infringement lawsuit – when you include not just legal fees but filing fees, consultants, expert witnesses, damages experts, deposition and interrogatories, travel expenses, trial demonstratives, etc. – will cost at least $400,000 and could run as high as $1 million dollars. And that is just to sue one infringer. When there are multiple infringers – as there often are – each infringer has to be sued separately under a recent change in U.S. patent law. And these numbers only cover an initial trial in District Court, not the cost of appeals.

When Apple sued Samsung back in 2012 for infringement of its i-Phone patents, at least it was a fair fight. Each company could afford to pay millions in legal and litigation support services fees for both the original trial and all the appeals. But when the patentee is an individual or a small business, suing a major corporation for patent infringement it is most definitely NOT a fair fight!

And that is where patent litigation financing comes in. IP Holdings – if it believes you have a viable claim of patent infringement – will put together financing of your patent litigation on a contingency basis. By “contingency” we mean that IP Holdings (and any investors or affiliates or third parties we bring into the consortium) are only repaid if the patent infringement lawsuit produces a settlement or award. When a settlement is awarded, all the legal and litigation support expenses are subtracted, and the net settlement is shared between the original patentee and the investors per an agreed-upon formula. If there is NO settlement, there is NO revenue for anyone, and the investors write off their investment in the litigation.

Understand, however, that enforcing your patent is a High Risk/High Reward proposition. You could win big and generate millions in settlements from the infringers, but you could end up going to trial and losing – so NO revenue – or having the patent ruled invalid – so NO revenue and NO patent!

If you have a patent that you believe has been infringed – and you can identify specific products or services from specific companies that are infringing a specific claim in your patent – please use the form on our Contact Us page to tell us about your patent and who is infringing it.

Monetization through a Patent Broker

Another option to consider is to take your patent to a patent brokerage firm to see if the company can sell it to one of several patent assertion firms. A patent assertion firm is a company that buys patents that have been infringed, and then files patent infringement lawsuits against the infringers. This is the Low Risk/Low Return option because you will not be paid as much for your patent as you might have earned through direct enforcement of the patent, but you are paid cash up front and you assume very little risk.