Patent litigation was on the rise in 2021.  The increase in new case filings, however, was largely attributable to a small number of high-volume non-practicing entities (NPE) which practice a so-called “file-and-settle monetization” strategy.[1]  The leverage behind a “file-and-settle” approach for a plaintiff is often the high expected cost to defend against allegations of patent infringement.  From a defendant’s perspective, settling for an amount less than expected defense costs may be viewed as a reasonable business decision, often without regard to the actual potential risk of liability. 

You can’t prevent being targeted by a lawsuit, but there are things you can control, starting with your selection of counsel.  Retaining highly competent, cost-effective and efficient counsel to negotiate a favorable early settlement while still fully protecting your rights in the litigation and managing your legal spend is critical.  When selecting your defense counsel, make sure that they have a well-conceived strategy not only for successfully litigating the case to trial, should that be needed, but also for pursuing early resolution to minimize the legal spend whenever possible.   This is especially important in the case of high volume NPE cases which seldom go to trial. 

 The cost of resolving a case is the combination of litigation costs and the ultimate settlement amount. There are times when an aggressive litigation strategy is called for, but aggressive strategies typically result in a higher litigation spend.  Does the proposed strategy have a path leadig to the lowest cost of resolution?   In evaluating the strategy, ask “how does this impact the resolution.”  If a dollar spent on litigation doesn’t reduce the cost of resolution, is it money well spent?  

[1] Law 360, “2021 Ended with Overall NPE Uptick, Report Says,”  Tiffany Hu, January 12, 2021