Current Patent Litigation Costs Are Between $2.3 to $4M - from the BlueIron blog
Patent litigation in the US has two major stages: claim construction (sometimes called a Markman hearing) and a trial for infringement and damages. In a vast majority of cases, once the claim construction is done, the writing is on the wall and a settlement happens.
The American Intellectual Property Lawyer’s Association (AIPLA) issues a bi-annual survey of IP-related costs. In the latest survey, the claim construction portion of a patent litigation ranges from $250,000 for less than $1M at risk to $2.375M for cases where $25M or more is at risk.
For the entire trial, the AIPLA says that for less than $1M at risk, the trial will cost $700,000, while the very high value cases will cost $4M or more.
“The AIPLA data says that with less than a million dollars at stake, both parties will have to spend $700K – or a total of $1.4 million dollars to fight a patent lawsuit,” says Krajec. “That is crazy that the expenses are so high.”
“Startup companies are always cash-constrained,” continues Krajec. “No startup has the cash reserves required to go up against a Big Tech company that decides they want to use the startup’s technology. Not only does this happen in technology-based companies, but it is standard practice with the life sciences space. Certain big companies find it cheaper to blatantly infringe a startup’s patents and just dare them to sue.”
Patent enforcement and defense insurance gives a startup the means to survive patent litigation, yet few startups bother to get these policies.
“Most angel investors who are board members require a startup to have director’s and officer’s insurance. Over the last decade there were fourteen patent lawsuits for every individual D&O claim,” says Krajec.
BlueIron is a broker for patent enforcement and defense insurance policies, including policies written by Intellectual Property Insurance Services Corporation in Louisville, Kentucky. “IP insurance is the only insurance we sell, as part of our whole patent-based financing options for companies from startups to publicly traded companies.”
Schedule a call with BlueIron and see if Intellectual Property Insurance is right for your company.
Learn more about BlueIron’s IP insurance here.
About BlueIron: BlueIron provides IP-related financing for companies from startups to publicly traded companies. BlueIron finances the cost of getting a patent and building patent portfolios, provides insurance for enforcement and defense of those patents, and can provide $2-5M loans using patents as collateral. You can read the BlueIron blog here.
About Russ Krajec: Russ Krajec is a registered patent attorney who has been practicing for over 20 years, as well as a podcaster, blogger, and author. His book “Investing In Patents” describes the business criteria used to identify good inventions and good patents. Krajec is the host of the Patent Myths podcast, which looks at IP from a business standpoint.