Litigation Costs

Litigation Costs

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The following figure^[1]The figure is based on the numbers disclosed in “Typical Costs of Litigation,” Report of the Economic Survey 2011, American Intellectual Property Law Association, available for download at … Continue reading  gives some idea of the average costs associated with a patent litigation suit.  Notice that although the years may change, the price stays relatively in the same range.

MEDIAN LITIGATION COSTS FOR PATENT INFRINGEMENT

	2005	2007	2009	2011
Less than $1M at risk
End of Discovery	$350K	$350K	$350K	$350K
All Costs	$650K	$650K	$650K	$650K
$1M – $25M at risk
End of Discovery	$1.25M	$1.25M	$1.5M	$1.5M
All Costs	$2.0M	$2.5M	$2.5M	$2.5M
More than $25M at risk
End of Discovery	$3.0M	$3.0M	$3.0M	$3.0M
All Costs	$4.5M	$5.0M	$5.5M	$5.0M

These patent litigation costs only relate to legal fees associated with those that are representing the case for the client.  This does not take into account additional fees or damages associated with the suit, particularly if you lose the battle.  However, these legal costs may also include expert testimony which may range anywhere from a few thousand to a few million.

In view of this, an initial patent strategy given to a client may change.  Rather than reap value through litigating (extremely costly), other options may include licensing or selling the assets.  If infringement is occurring, the value of the assets may increase regardless of the route taken (e.g. litigation, licensing, selling, etc.).