A patent litigation contingency is a legal situation in which a patent attorney will take on a case for a client with the agreement that the attorney's payment will be contingent on the outcome.

What is a Patent Litigation?

During the medieval times, people referred to war as the kings' sport. For corporate CEOs, patent litigation is today's sport. Patent litigation is the legal process by which an owner of a patent sues another for manufacturing or selling the patented art, invention, or design without permission.

Plaintiffs and Defendants

In patent infringement legal cases, plaintiffs are often small businesses or individuals with limited resources. The defendant in a major patent infringement case could be a large corporation that can spend millions of dollars on its defense. As you determine whether you want to take patent cases on contingency, consider several important factors.

Strength of the Patent

The first factor to consider is the strength of the patent. Not all patents have the same weight and merit, so a lawyer will typically look at the prosecution history of similar cases through the United States Patent and Trademark Office (USPTO). Any similar issues through the USPTO can indicate that the specific patent you're looking at could pose a problem and become the subject of a litigation.

It's also important to review all prior art that was cited through the prosecution of the patent. Searching the prior art before opening a litigation case can also help identify potential strategies and solutions for any possible problems.

Strength of the Infringement Case

Another factor to consider is the strength of the infringement case. Patent claims include detailed language that outlines the ownership of the patent holder. These claims are similar to a survey of a property. Real estate goes through a surveying process that clearly shows the lines of the property, indicating the beginning and end of the land owned by an individual or company.

Patent claims are similar to real estate property lines as these claims clearly identify the intellectual property owned by the patent holder. The identification is either visible in drawings for design patents or descriptions for other types of patents.

In order to file a case for patent infringement, you must prove that someone has infringed on one or more claims made in the patent application. A judge or jury will then compare the specific patent claims and language around those claims with what the potential infringer is doing or selling. If an infringer is taking action that is identical to the language of the patent claim, the jury or judge will determine that infringement has occurred. When infringement has taken place, the next step is calculating the damages, which can be done in several ways.

An owner of a copyright could lose out on royalties or income if their work is used without their authorization. An attorney will review all the patent claims made to decide whether a jury or judge is likely to rule in favor of infringement. Before accepting a case, the attorney will typically look at how well the claims align with potential infringement.

Value of Infringed Features to the Infringer

The value of the features being infringed upon will also impact the outcome of an infringement case. If a patent has multiple claims, the infringement may only impact one part of a complex system or large machine. Under patent laws, plaintiffs may recover monetary damages linked to any features of a patent on which someone infringed. Determining the value of that feature is important when figuring out the value of the monetary damages. If the infringer earned any money by using the feature, that amount could be recovered as damages, paid to the patent holder.

Before taking on a case, a patent lawyer will assess any business that the infringer took on and how much money was earned through the exploitation of the feature that is patent protected. It's also important to compare royalty rates and other monetary factors in similar cases, which can help an attorney forecast what could potentially be recovered in an infringement litigation.

Identity of the Infringer

When looking at a patent infringement case, an attorney must determine whether the defendant would be able to pay any required damages if the judge ruled in favor of the infringement. If a patent infringer isn't able to pay, it's not worth the time or cost associated with taking legal action to prove infringement.

If you need help with patent litigation contingency, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.