With more patents issuing than ever before, there is a greater likelihood that your company will become a party to patent litigation. It is important, therefore, to familiarise yourself with the basic factors affecting the cost and duration of patent litigation.
The average patent litigation lasts about two years and costs about $3 million. An appeal can add another $2 million and one year to that estimate.
Patent litigation cost and duration depend on a variety of factors. Our firm represented a generic pharmaceutical company in litigation involving a product with over $1 billion in annual sales. Given the numbers at stake, the patentee spent nearly $15 million on the litigation. In contrast, our client, one of three defendants in the case, had significantly lower stakes and resources. Our litigation strategy, therefore, was naturally different from the patentee's and our client spent a fraction of what the patentee spent.
Generally, major factors affecting the cost and duration of patent litigation include the following:
- Product's value to your business Analyse the financial impact of winning (and losing) the litigation. In consultation with your attorney, establish a target litigation budget based on these figures.
- Product's value to your adversary and their resources Make no mistake, your adversary will conduct its own cost/benefit analysis. The greater the potential impact of the litigation on your adversary's business and the greater the resources of your adversary the more costly and lengthy the litigation will likely be.
- Number of patents, defences and parties involved - The more patents, defences asserted, and parties to the litigation, the more likely the litigation will cost more and last longer. To reduce costs, pursue only substantial claims and defences, and pool resources with similarly aligned parties.
- Volume of evidence - The number of documents to be reviewed (thousands or, in larger cases, millions) and witnesses to be deposed impacts the cost and duration of litigation.
- Venue Where a case is brought (i.e., which court) can affect duration by as much as 50% to 100%. Some courts are busier than others; some venues are more favourable to one party or the other.
- Law firm and litigation strategy Patent litigation specialists can lead to more efficient and better results. There also are substantial differences in the billing rates between the very large firms and smaller, specialised (boutique) firms.
As a potential plaintiff or defendant, you need to plan carefully and consult with your attorney, because you are in a position to substantially influence some of the above factors.
|Richard D Margiano|
Cohen Pontani Lieberman & Pavane LLP
551 Fifth Avenue
New York, NY 10176
Tel: +1 212 687 2770
Fax: +1 212 972 5487