EXPENSES ON A PATENT LAWSUIT

 

In the present scenario growing patent infringements suits has led to an enormous increase in patent litigation but at the same time there is a scarcity of a valid patent system to provide a solution. The present system is both expensive and doesn’t qualify a benchmark that fulfills the interest of masses. The innovators has to be on their toes to make a sound decision  on this as this might cost a company to a much larger extent than one can think of. This is applicable to both the parties; whether you are facing a lawsuit or planning to sue others.

The results shown by a recent survey conducted last year by the American Intellectual Property Law Association to find median litigation costs for patent infringement suits were really astonishing(at least for the beginners).

·       If a company is claiming worth less than a $1 million, median legal costs turns out to be $650,000.

·       A claim of between $1 million to $25 million would give total litigation costs of $2.5 million.

·       When a bigger amount of $25 million is at risk, median legal costs are $5 million.

 This whole procedure would be really expensive let alone the losing part. For the defendants, who lose the case, needs to worry for the financial crises as the situation would be more severe?

IRONY FOR THE BEGINNERS

It is ironical that smaller or pioneer companies in this field go for the settlement rather than facing a lawsuit as it would be really calamitous for the beginners. No wonder it would be incorrect. But it would be cheaper to settle a case or agree to licensing terms for, say, $100,000, rather than fight, said Christopher Marlett, CEO of MDB Capital Group, an investment banking firm that focuses on intellectual property.  

Analyzing the whole situation, something that adds to the severity to the criterion of patent lawsuits is the jury that gives their judgment over the issues. Most of the times, jury has no technical background and “there is a very technical presentation to a this jury having no technical background," said Marlett. "In a lot of these cases, the juries say this is above my head, and the judgment goes to the lawyer they like the most.” If these claims were decided by a panel of technical experts, the fight would be worth it. But again it would be something to avoid that our own peers but not our technical peers become the members of jury. The issue on judgment that would give justice is still debatable.

Comparing with the cost figures for patent litigation over the years, the numbers has not shown any variation over the year; which in turn is scarier. Adding to it, if patent litigation are compared with trademark litigation; patent litigation are at least twice more expensive.

“What could be the solution for this” is the question of the hour. The pioneer companies in this trade are left with two options; either to give their best shot with a hope that everything turns out to be right or let someone else do it for them; obviously money is to be paid to them for this. Marlett's company has come up with a solution for this wherein it will conduct a "freedom to operate" survey before a company files a patent to be certain that whatever it's building isn't infringing on known patents, nor are its partners. A typical survey will cost about $100,000. It is somewhat expensive; but again it’s really worth it as it gives some sort of certainty and protects your assets argued by Marlett.

On the other hand, this devastating nature of patents has turned out to be beneficial for certain companies. Not going much back, it’s quite evident from the very recent example of VirnetX. In its early days, it aggressively patented technology that created virtual private networks over the Internet. It wasn't long before nearly every big tech company was doing the same. VirnetX eventually sued Microsoft and won a settlement for $200 million. Now it's suing Apple, Cisco, and other big companies. Now the publicly traded company is worth $1.2 billion.

"If that (intellectual property) strategy was not in place," Marlett said, "it would have been worth zero."

Can VirnetX be called as patent trolls because they sued over intellectual property? VirnetX response would certainly be negative arguing big companies were stomping on their rights “The whole idea of exclusive rights in the patent law is to provide an incentive for innovation to arise, and it's a limited right," said Crowne.

There is no ambiguity in the fact that the patent legal industry is a high-priced, high-stakes and really expensive but ultimately paramount part of doing business particularly when the business is all about innovation and implies to high tech or any other industry. Even the staunchest defenders of the current patent system agree the litigation would bring much more legal obligations than the advantages and sometimes the patents that get rewarded don't make a whole lot of sense, but eventually it again creates a debate as the older method is even worse.

Recapitulating the various issues and examples mentioned above one could easily go with option of taking away the rights and not to care about being innovative owing to overly broad patents and a system that so often seems to reward brain-dead-obvious patents (a means of placing ads on a Web page, anyone?), however, essentially is really important as it gives the monitory reward to the innovators for the great ideas and one must gives due respect to this system but at the same time we should all together work against the factors that kept it away from maintaining a pace with the times and not giving space to the beginners to come up and show their forte!!!!!