Litigation Finance – An Alternative Capital Source for Patent Lawsuits

Written by: Dr. Donald E. Vinson, CEO


Over the past year, patent practice has become prominently controversial over how to curb non-practicing entities (NPE), aka patent trolls, without affecting American innovation adversely. In a recent IPWatchdog article, “If patent reform goes wrong,” Joseph Allen argues that an objective assessment of the need for patent reform should take into account patent owners who have legitimate infringement claims but to pursue them feel they must turn to NPE's for financial help. Mr Allen asks “[A]re we designing a system that's out of reach for those who historically drive American innovation?” What Mr Allen doesn't mention is another option, litigation finance.

Instead of resorting to NPE's to pursue legitimate claims, holders can engage litigation finance firms to assist them in their disputes. Vinson Litigation Finance offers non-recourse capital for parties in litigation or arbitration. If the party doesn't win, the financier doesn't get paid.

Vinson Litigation Finance has expertise and resources for objective, scientific analyses of litigation risks before client litigants expend substantial resources. This analytic ability can be crucial to client assessments of potential risk of loss versus likely value of enforcement.

Litigation finance also connects patent holders with law firms best suited for their purposes. Non-practicing entities may require representation by their own lawyers only. On their own, individual patent holders may have difficulty convincing law firms to represent them for fees contingent on awards of damages. Litigation finance gets them access to the firms they need to win their cases.