Tuesday, October, 20, 2009

Some Things Just Ain't Meant To Be Cheap, So A Two-For-One Is Probably Out Of The Question: Managing Patent Litigation Costs

Nobody ever walked into a Rolls Royce showroom expecting to drive out in a new model without taking a hit in the wallet. (Of course, if you're in the Rolls showroom, you can probably afford the hit.) Ditto that yacht, house, or even a really nice bottle of Chateau Montelena Cabernet. (And if you want to know why Chateau Montelena is so expensive, see Bottle Shock.) Good legal representation also costs, and with very good reason that you, in particular, don't need a movie to explain. And patent litigation, because it is extra specialized, complicated and takes a really long time, can be über expensive. Still, both lawyers and clients struggle to come up with ways to keep those costs from making that Rolls Royce seem like a Chevy Nova.


Mark L. Levine and Alan E. Littmann, of Bartlit Beck Herman Palenchar & Scott LLP have given much thought to controlling these costs, and the result is Managing Patent Litigation: Successful Results at Reasonable Cost. Toolbox likes their approach because they start off by saying what everyone knows: "There is no way to make patent litigation inexpensive"; however, they believe "there are some good ways to minimize the costs." And that is critical if you understand just how expensive patent litigation is: "Median patent litigation costs are $5 million for suits with more than $25 million at risk. Perhaps even more problematic, suits with less than $1 million at risk have a median cost of $600,000 — approximately 60% of the total amount at stake." Levine and Littman outline several actions litigators can take to hold costs at bay. Their first three suggestions come under the rubric of reducing the uncertainty in litigation cost. They suggest three important ways to reduce uncertainty:

  • objectively evaluate a patent prior to starting litigation — often the most difficult part of litigation is defining success
  • use alternative billing structures
  • effective scheduling, e.g., "schedule claim construction prior to significant discovery" if possible in your jurisdiction.

The authors make several other suggestions in the areas of discovery management; using demonstratives — "worth a thousand words, and several thousand dollars"; controlling expert costs; handling multi-party litigation, e.g., "consider entering a joint defense agreement with other defendants"; clients can try patent litigation insurance; and there's also litigation financing, which is a fascinating concept. Anyway, this one's a keeper. And with the savings from the litigation, you never know, your clients may buy you a bottle of that wine, if not a Rolls.


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