Intellectual Property, 5th Edition

CHAPTER 13AEXPLOITATION STRATEGIES

One way to exploit intellectual property rights is through licensing. Another and an increasingly more common way is through litigation. Having a third‐party foot the bill is a great way to seek, and potentially gain money, without a huge monetary investment from the rights holder.

Litigation funding provides third‐party financing of the legal expenses in exchange for a share of the proceeds recovered from the resolution of the dispute. The amount that will be financed and the specific terms of the agreement will vary based on the circumstances and parties involved. More on this later.

These litigation funding transactions are non‐recourse, such that if the rights holder does not recover from the litigation, then there is no obligation to repay the funder. This provides virtually no risk (monetary at least) to the rights holder.

Reputable funders generally do not exercise control of the litigation. This is something discussed that should be considered before the engagement of a funder and with the litigation counsel. Prior to seeking litigation funding the patentee and its counsel will have discussed the goals and criteria for the funding on their end. From the funder perspective, some criteria that funders use to evaluate a claimant (plaintiff)‐side litigation funding opportunity will include the: (1) merits of the claim, (2) specifics regarding the plaintiff, including the counsel representing them, (3) budget, (4) expected damages, (5) ...