Woodsford Discusses Approach to IP Litigation Funding

There has been much commentary in recent months on the role of litigation finance for intellectual property disputes, as it continues to represent a large share of all third-party funding commitments. In a new podcast, Woodsford shared its perspective on this area of funding, breaking down why litigation funding is so sought after in this industry, and what types of cases funders will pursue.

In the latest episode of the On Intellectual Property podcast, Jeff Harty interviewed Robin Davis, chief investment officer, and Bob Koneck, director of litigation finance at Woodsford. Davis explained that the ‘basic but unfortunate truth’ is that IP litigation is extremely expensive because of the need for expert witnesses, technical analysis and even the fees for IP specialist lawyers, due to their own technical expertise and training. As a result, litigation funding has emerged as a unique solution to solve the capital needs of potential plaintiffs.

Discussing how Woodford evaluates and selects IP cases, Davis highlighted that the main criteria for the funder is that the expected damages from a successful outcome must have a 10:1 ratio over the commitment required. She noted that when looking at the whole array of actions, patent and trade secrets litigation tend to meet this bar more often than trademark disputes, and that cases with multiple patent infringements are often the best opportunities.

Responding to the oft-stated criticism that litigation funding encourages patent troll litigation, Davis argued that Woodsford’s ESG and access to justice priorities align with inventors and small companies who have been infringed by large corporates. However, the funder also works with larger private and public companies who have had their IP infringed, as third-party funding can alleviate cost pressures for legal departments at these businesses.