INTELLECTUAL PROPERTY LITIGATION SERVICES

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It is no secret that litigation costs are immense, making the prospect of litigation a cost benefit decision. In patent litigation the patent owner is litigating for an injunction plus “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty.” 35 U.S.C. § 284. This may include any provable lost profit. The patent litigation process generally progresses through the stages outlined below over the course of 2-3 years, but as little as one year in some jurisdictions such as Virginia. Forum selection affects the burn rate. Many patent lawsuits reach a settlement at some point to avoid further costs, and RPX Corp. has researched the cost/benefit of settling a lawsuit at each of its various stages. Read their report here. However, litigation demands are not controllable and so the steps, costs and timeframe can vary widely. There are several ways to finance patent litigation.

Many law firms accept patent litigation on a contingent basis, e.g., a reduced fee arrangement in return for a percentage of recovery. There are also a variety of patent assertion entities that pay for litigation in exchange for a proportion of the recovery. We can provide more information on these options upon request. The following presents the typical stages of patent litigation, and typical cost ranges, duration and a projected timeframe.

Armed with a patent and suspicion of infringement, a patent owner must form a reasonable basis for bringing an infringement action, and this compels a threshold pre-filing investigation. Failure to make an adequate pre-filing investigation can lead to a violation of FRCP 11, and trial courts may grant sanctions, including expenses and attorney fees. The pre-filing investigation requires some infringement analysis by counsel, and obtaining a legal validity or infringement opinion best satisfies FRCP Rule 11.

This involves researching jurisdiction issues, prep of Complaint, securing local counsel (if needed), possible pre-filing settlement effort, filing complaint in U.S. District Court. Your trial counsel may need to secure the assistance of local counsel on your behalf and although their effort is ministerial they will have independent terms.

This entails preparation and filing an Answer to counterclaims, e.g., for declaration of patent invalidity, possible preparation and filing amended Complaint, responding to objections to pleadings, prep for and attending an initial settlement discussion, arranging for electronic discovery, attending a scheduling conference, and other court-ordered meetings, responding to motions to transfer, objections to pleadings, etc. A reasonable estimate based on publicly available data for the costs incurred in litigation prior to IPR filing (below) is approximately $200,000.

It is common for accused infringers to file a petition at the USPTO requesting “inter partes” review of the asserted patent. In many ways, IPR proceedings resemble a streamlined and accelerated form of court litigation on the validity issue alone. IPR is limited to grounds of invalidity under 35 USC §102 and 103 only on the basis of prior art patents and printed publications. The patent trial and appeal board (PTAB) has three months to decide whether to institute and twelve months to issue a final decision. IPR only proceeds if the PTAB sees a “reasonable likelihood” of invalidity of at least one challenged claim. IPR applies to any patent but is adversarial, unpredictable, and expensive in its own right. Most federal court judges are not inclined to staying, or suspending, an infringement lawsuit to wait for the outcome an IPR.

This entails the following tasks: negotiate protective order, prepare interrogatories, document requests, prepare responses to interrogatories, document requests, infringement/invalidity contentions, document review, and production, prepare fact witnesses, take and defend depositions, discovery motions.

To decide the questions of infringement and validity, the court/jury must first understand what the claims of the patent cover, that is, what they prevent anyone else from doing. A Markman hearing with full briefing schedule will be held to determine the claim construction, and the Court will interpret the claims and convey the proper claim meaning. The Markman claim construction briefing and hearing (est. 2-day) are most often held after discovery but before trial (in seventy-eight percent of cases). The scope of work is similar to a summary judgment motion.

Attending mediation, including the preparation of mediation statement.

You will likely need to solicit and hire three expert witnesses including: 1) an industry expert; 2) a technical expert; and 3) a financial expert (CPA) for damage calculations. Each will have independent terms (hourly rates). Each will need to be educated on the lawsuit and their opinions solicited in writing, each will be deposed on their written opinions, and each may testify at trial if the case does not settle earlier.

It is possible for the defendants to move for summary judgment based on a variety of grounds including lack of evidence. In such case we must obviously defend against such Motion by a series of briefs and a formal hearing.

This portion of the budget involves extensive pretrial preparation, planning and documentation on the issues charged.

Assume a two-to-three week trial, extensive trial preparation, planning, documentation, and all-hands-on-deck 24-hour participation.

This can involve extensive post-trial briefing, responding, and argument to uphold an infringement verdict and the validity verdict despite post-trial motions for clarification (e.g., claim construction), JMOL, or new trial.

So as you can see, entering into litigation is not a decision to be made lightly. Royal Craig, LLC. will consult with you extensively on all of your legal options, whether you are the plaintiff or the defendant, and develop the best course of action. We have a proven track record of successfully litigating cases in state and federal court. Royal Craig has also testified as an expert witness.