Many inventors and small companies may not be fully aware that certain law firms in the US regularly take patent infringement cases on a contingency fee basis. This article reviews key factors that patent owners should keep in mind while evaluating the possibility of approaching a contingency fee litigation firm for representation.
More specifically, this article provides a brief and necessarily incomplete discussion of the following issues: (1) what makes for a great infringement case; (2) how are law firms and patent owners likely to work with each other; and, (3) what are some major risk factors in bringing an infringement case?
Infringement Case Ingredients
When evaluating the possibility of bringing an infringement case, patent owners should consider these factors:
- Do you have the potential to be a great client? Witness? From the very first contact with a law firm, litigators are asking themselves whether the prospect would make a great client. If the prospective client is also the inventor, would the inventor make a great witness? Some inventors don’t get it. In one case, despite my attempts over several months to educate an inventor, on the day the infringement suit was to be filed in court he insulted the litigators and they understandably dropped the case. One can’t be too careful or too circumspect when talking with litigators.
- Patent quality and the number of patents being infringed. As I’ve noted elsewhere (here and here), most patents are essentially worthless and will not stand up in litigation. The primary reasons are a limited prior art search and/or poorly crafted claims. In addition to strong patents, litigators would usually prefer a case based on a few related patents rather than a case based on a single patent, thus reducing their risk.
- Proof of infringement. I’m often approached by patent owners who say that a so-and-so is infringing their patent. When asked how they know this, answers often include “they have to be” or “it’s obvious.” Patent owners will advance their cause by collecting as much information as possible that documents the infringement (without violating confidentiality agreements or other contracts with non-use provisions). The more documentation, the more likely a firm will take the case on contingency.
- Number and size of infringers. To be interested in working on full contingency, law firms assess the risks. In general, the more infringers, the bigger the infringer(s), and the higher the sales of infringing products or services, the more law firms are willing to put their time and money at risk in a contingency fee case.
- Damages. Whether and how patent owners should be financially compensated for past and future infringement entails a very complicated set of issues that continue to evolve. Congress and the courts have made it increasingly difficult—but not impossible—for patent owners to get a reasonable return from litigation. That said, it is the cases with strong patents, large markets, great litigators, and wise and practical patent owners that tend to yield the best results.