How much does patent litigation cost?
According to statistics and economic surveys, the median patent litigation cost is roughly $1.5 million cases where the amount of stake ranges between $1 million and $10 million. Where $10 million to $25 million is at stake, the median cost is approximately $2.7 million. Furthermore, these costs do not include any challenges filed with the USPTO, such as IPR petitions. With such stratospheric fees, how can midsize businesses afford to enforce or defend a patent lawsuit? How can smaller businesses reduce patent litigation costs to make them within reach?
Need more affordable costs for patent litigation? Contact US patent attorney Vic Lin at vlin@icaplaw.com to explore ways to enforce or defend a patent infringement claim within your budget.
What are shortcuts to end a patent lawsuit quickly?
One approach to reducing attorney’s fees is to end a patent lawsuit quickly. Would an early settlement or motion to dismiss be possible? For defendants accused of infringement, would a motion to dismiss for lack of personal jurisdiction make sense? A major factor here will depend upon the minimum contacts that the defendant has with the state in which the patent lawsuit was filed.
Would a motion to transfer venue make sense? Most federal courts consider a number of private and public factors in making this decision. While this will not terminate the case, a successful venue transfer may give you leverage to settle the case sooner.
How do you gain leverage to settle a patent lawsuit early?
Shortcuts are great. The problem, however, is that they are unavailable to most defendants in a typical patent infringement lawsuit. For accused infringers, there might be cost-effective ways to put pressure on the patent owner to withdraw or settle the patent infringement case.
Does the patent-in-suit have invalidity vulnerabilities that can be challenged at the USPTO? If so, would an ex parte reexamination request or an inter partes review (IPR) make more sense? Ex parte means single party while inter partes means both parties.
Keep in mind that an invalidity challenge hits a patent differently than a noninfringement argument. Noninfringement is specific to each accused product. For example, a successful noninfringement argument may be made fore Product A, but Products B and C might still infringe.
A successful invalidity attack, however, would invalidate the patent entirely. Thus, the patent would be rendered useless against all competitors. This can be good and bad. You will not have any risk of infringement liability, but neither will your competitors.
If a case does not settle early, see the strategies discussed below to gain settlement leverage.
What are affordable ways to litigate patents?
You will want access to litigation teams that offer significantly lower hourly rates. We work with skilled patent litigation teams that offer hourly rates at 30% to 50% lower than average hourly rates of US patent litigators.
While lower hourly rates can certainly help, you have to consider a few other important factors. As discussed below, the efficacy of a more experience patent attorney at a higher hourly rate may lead to more cost-effective results.
Should you compare only hourly rates?
Lower hourly rates do not necessarily guarantee lower patent litigation costs. A patent litigator charging over $1,000 per hour might be more cost-effective than a lawyer with an hourly rate of $500. How? The amount of time that a seasoned patent litigator will charge on a case can be drastically lower than that of a lesser experienced attorney.
For example, experienced patent litigators may advise you to steer clear of certain motions with low probabilities of success. Avoiding costly motions and ineffective discovery tactics might save you hundreds of thousands of dollars.
What are cost-effective ways to gain leverage and settle a patent case without going to trial?
Sometimes a patent lawsuit will continue for awhile despite your efforts to settle the case early. Perhaps the opponent has not been willing to compromise. You may need to gain leverage to apply pressure on the plaintiff or defendant, as the case may be.
Claim construction is a pivotal turning point in patent litigation. How the judge construes key claim terms will then determine infringement and invalidity contentions. Each side will advocate certain claim constructions that will lead to more favorable contentions for their respective arguments on infringement and validity.
For example, accused infringers who see an opportunity for noninfringement will typically argue for narrower interpretations of certain claim terms. At the same time, accused defendants may argue for broader interpretations of other claim terms that do not provide for any noninfringement options. Such broader claim constructions can open the door to cover certain features in the prior art.
Should you consider success-based fees contingent on patent litigation results?
Some firms may be willing to reduce or eliminate their attorney’s fees in exchange for percentages of any future monetary recoveries. These deals are known as contingency cases. A full contingency is an arrangement where the client pays no attorney’s fees. A hybrid contingency case will involve reduced attorney’s fees in exchange for a portion of a future recovery.
Success-based attorney’s fees align the law firm’s interest with the client’s goals. Risk is shifted from the client to the attorney. In exchange for the risk, the attorney seeks a potentially outsized reward. Contingency cases come in all shapes and sizes, but the two most common requirements include:
- Large amount of potential recovery (e.g., starting in the tens of millions); and
- High probability of success.
In other words, both the potential monetary rewards and the merits of the case must be substantially high.
Is patent litigation funding an option?
IP litigation funders will consider funding infringement cases that fit within their parameters. In addition to the financial recovery and merits, each litigation funder will have its own particular focus.
Our firm can assist in preparing the presentations and packages of information that litigation funders will want to see in order to evaluate a patent case.
Looking for more affordable patent litigation costs?
Contact US patent attorney Vic Lin at vlin@icaplaw.com to explore how we can help you fight your patent litigation case with wiser strategies and more affordable costs.
