Patent Funders: So Much More Than Patent Litigation Financing

Patent Funders: So Much More Than Patent Litigation Financing

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Today many companies make the business decision to infringe patented technology instead of paying a royalty to license it—so called efficient infringement. The calculation is that it will ultimately be less expensive to ignore the patent rights of innovations than to take a license in an arm’s length negotiation. Over the last 15 years that calculus has largely proven correct, with changes to numerous laws and the introduction of additional administrative processes all conspiring to make it easier to challenge issued patents. This means that litigation is often the only way for an innovator to protect valuable intellectual property and to stop infringement. Unfortunately, lacking leverage and financial resources, many patent owners cannot stop infringement, in some instances even after a jury trial.

Finance has increasingly entered the patent litigation space over the last several years, and more recently insurance too, with a great deal of money almost flooding the marketplace now. This money and its creative deployment strategies are starting to equalize the playing field, which will likely continue for now as damage verdicts are high and the Federal Circuit is showing willingness to accept enhancement multiples to punish willful infringement. Of course, the deals and variety of vehicles being used are highly structured and increasingly complex. For that reason, today it is probably better to think of “patent funders” as dealmakers, or perhaps financiers. Simply funding patent litigation is only a piece of what they are doing.

Materials*

Patent Litigation Financing: Fighting Efficient Infringement with Funding

Patent Litigation Likely to Rise with More Litigation Financing Opportunities

The Market For IP-Based Financial Offerings Is Finally Maturing

* A Note on Materials: We apply for MCLE, which requires substantive writing on the topic covered. The materials provided below, often published by IPWatchdog.com authors and contributors, relate to the topic but are not intended to pigeon-hole guest speakers in any way. They are hopefully informative, and the articles we select have to date always been sufficient to satisfy MCLE authorities.