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Litigation Funding in Brazil Could Explode After 231,000 Patents Are Granted to Reduce Backlog

January 15, 2018

Litigation Funding in Brazil Could Explode After 231,000 Patents Are Granted to Reduce Backlog

For the past 15 years, Brazil has suffered one of the world’s most chronic and severe backlogs of pending patents. Now, the Brazilian Patent and Trademark Office (PTO), is looking to reduce that backlog in one fell swoop: by granting patent rights until 2020 to 231,000 pending applications with no examination. The Brazilian government is seeking to introduce this emergency measure as an “extraordinary solution” to the crisis that has plagued the nation’s patent market for a generation. Brazil’s patent problems arose after it enacted the Patent Statute in 1996, making the nation TRIPS compliant and expanding its range of patentable products and industries. As a result, the number of patent filings has increased 200% over the last 15 years, without a corresponding increase in PTO examiners. Brazil’s current average waiting time for all technological patents is over 10 years. For pharmaceutical and telecom patents, the average wait time is over 13 years. According to the PTO, the current number of examiners (326) is sufficient to handle the present influx of new filings, however it is the backlog that is keeping the PTO in check. Therefore, the PTO has floated the idea that 231,000 pending patents within the backlog (not including pharma patents, which are covered by a separate regulatory body) be immediately granted with no examination required. Here’s where things get tricky, however: a third party would maintain the right to file a pre-grant opposition within 90 days of the automatic patent filing. Should a pre-grant filing take place, the patent application would automatically be reviewed by the PTO. Companies could then theoretically check the automatic patent application list for competitor patents, and file a pre-grant opposition in order to remove their competitors’ patents from the queue. Of course, that type of action would require an upfront legal spend. Perhaps this is an area that astute litigation funders in the market could pursue– There is additional concern, of course, that patents granted via the automatic waiver may in the long run be vulnerable to invalidity challenges in post-grant opposition, as well as the Federal Courts. Local and state judges may also be reluctant to enforce patent decisions in cases involving patents obtained through automatic application. The PTO itself is not beyond judicial reproach; there have already been numerous lawsuits against the PTO grounded on the unlawfulness of the lengthy backlog, which have successfully compelled the PTO to examine a patent application by means of a court order. So it’s not a given that the PTO’s automatic grant will be accepted by state and even federal courts. Again, these are all nitty-gritty details that could play out in the litigation finance industry’s favor, should the PTO move ahead with its suggested ‘extraordinary solution.’

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Ignite Specialty Risk Argues Conventional ATE Limits No Longer Match the Claims Being Run

The head of personal lines at Ignite Specialty Risk has argued that standard after-the-event indemnity limits are being outgrown by higher-value claims and group actions, and that insurers need to rethink both limits and long-standing exclusions.

As reported by Legal Futures, Kyle Stubbs writes that modest limits and standard policy structures served personal injury and consumer claims adequately for years, but that "as damages, disbursements and adverse costs exposure continue to increase, there are more cases where conventional scheme limits may no longer provide adequate protection." He identifies catastrophic injury, clinical negligence and professional negligence as the areas where the gap is widest.

Group litigation is the second pressure point. Multi-party claims have historically been excluded from many ATE products, an approach Stubbs argues is becoming untenable. "The growth of collective consumer actions and multi-party litigation means these claims are likely to become a far more established part of the legal landscape over the next decade," he writes, suggesting insurers will need to price the risk rather than carve it out.

The piece also points to rising complexity in costs management and regulatory attention on premium fairness and consumer protection, with pressure for premium structures that remain proportionate to the cover provided.

Ignite has expanded its litigation insurance footprint over the past several years, launching capital protection insurance in the US, extending its offering across the EEA and entering the Australian market with a Sydney hire.

Commercial

Signature Litigation Says CAT Reform Should Filter Weak Claims Without Chilling Genuine Ones

Lawyers at Signature Litigation have argued that the UK government's latest consultation on the opt-out collective actions regime must raise the certification bar without loading additional cost and delay onto class representatives.

As reported by The Global Legal Post, partner Becca Hogan, senior associate Tom Crawford and paralegal Nikki Sutton-MacGregor write that businesses facing collective claims can incur significant cost, uncertainty and reputational exposure before the merits are tested, while a low certification threshold leaves claimants exposed to funding expensive claims that ultimately fail.

The Department for Business and Trade consultation proposes a more explicit statutory merits test and closer scrutiny of costs against overall benefits. The authors note one proposal would have the Competition Appeal Tribunal indicate the "reasonableness" of a litigation funder's return at the point of certification. They cite the consultation's reference to claims against Stagecoach South Western Trains, where less than £216,000 reached class members against "more than £10 million" paid to lawyers, funders and other advisers.

On funding, the authors observe that the consultation "appears to give the green light for damages-based agreements," which would go further than the stalled Litigation Funding Agreements (Enforceability) Act 2024 by permitting DBAs directly in opt-out proceedings. They argue wider funding options should increase competition, reduce the cost of litigation finance and lift claim volumes, noting that market practice currently suggests a quantum of at least £500 million is needed to attract certain funders.

The consultation closes on 25 September 2026.

Commercial

Australian Group Costs Orders Are Settling at Almost Exactly the Same Rate as Funder Commissions

Victoria's contingency fee regime is producing court-approved rates that track third-party funder commissions almost precisely, according to the Australia chapter of Chambers' Litigation Funding 2026 guide.

According to the Chambers and Partners practice guide, authored by Jason Geisker, Dirk Luff, Sam Sheridan and Georgina Overend of Claims Funding Australia, the median group costs order rate since the regime began is 24.5%, within a range of 14% to 40%. That figure "closely compared to the 24% median rate for third-party litigation funding commissions" considered by courts across the seven years from the first common fund order in October 2016 through 31 December 2023.

Under the Victorian model, the Supreme Court fixes the percentage payable to the plaintiff law firm early in the proceeding and "may revisit this percentage at a later stage," including at settlement approval. The guide cites *Bogan v The Estate of Peter John Smedley (Deceased)* [2022] VSC 201 as authority that fee-sharing with funders is permissible under a group costs order, provided the law firm is not a "mere front" for the funder.

On after-the-event insurance, the authors report that competition "has applied downward pricing pressure, with more flexible options than the historical 20–40% of policy indemnity limits." They point to *i-Prosperity Pty Ltd (in liquidation) v Crown Melbourne Ltd* [2025] NSWSC 1525, where the court accepted that an ATE policy carrying an anti-avoidance endorsement provided adequate security for costs.

The guide estimates Australian litigation funding market revenue at A$123.6 million for the 2025–2026 financial year.