Patent Infringement Litigation Represents Major Growth Sector for LitFin
One of the largest areas of growth for litigation funding commitments is in the world of patent litigation, with patent infringement cases representing a lucrative world of disputes between patent holders, inventors and corporations. These funded lawsuits have become increasingly prevalent, yet with this activity has come an added layer of scrutiny as to the nature and origin of third-party funding. Reporting in Bloomberg Law details this trend, highlighting the recent case of VLSI Technology and Intel Corp., where Fortress Investment Group funded VLSI’s case and successfully secured a $2.18 billion verdict in its favour. Both parties are now set to appear before a federal district court, to examine whether VLSI sufficiently disclosed the financial backing it received. Regardless of the outcome of that case, it is expected that funders will continue to target similar cases, as Westfleet Advisors' managing partner, Charles Agee, points out that the costly and protracted timelines of these cases often could not go forward without third-party funding. Despite the expensive nature of patent infringement disputes, the possibilities of large payouts like the VLSI case make them an attractive proposition for funders. This viewpoint is reflected by other funders, with Burford Capital’s managing director, Katharine Wolanyk, stating that their firm receives more intellectual property-related requests for funding than any other area. Wolanyk also notes that this activity is now seeing patent owners exploring third-party financing much earlier in the process.