A client with patent applications covering a novel manufacturing process approached Deminor to request litigation funding for its dispute. The defendant had initiated proceedings regarding inventorship of the patent to be enforced which were ongoing meaning that the patent office had delayed grant pending the outcome of that case.
Process & Approach
Deminor’s due diligence in this case was supported through review of the proceedings that were ongoing. Although the inventorship proceedings were not infringement proceedings, the parties had aired aspects of the case and this background was useful in forming a view as to the likelihood of success. Deminor’s case management team were able to review the documents in the language of the proceedings without needing to rely on translations.
This case was a little unusual in that the patent had not yet been granted. In assessing the economics of the case, Deminor’s review had to focus on the availability of damages modelled at the date of trial. Usually, damages are awarded from the date of grant of the patent onwards which would have meant a limited back damages period in this case. However, the claim set had not been amended during the final phases of prosecution and “intent to grant” had been communicated by the patent office pending resolution of the inventorship claim. This meant that damages could potentially be available for infringement of the patent application in its final form resulting in a longer damages period. Deminor spent time understanding the client’s strategic aims and its decision making process regarding key litigation decisions such as settlement. Forward damages are always less certain than back damages as the client may be looking for an injunction or the defendant may stop using the patented invention. Deminor’s review included understanding the client’s view of the case as well as looking at the defendant’s approach to other litigation that it had been involved with.
However, although the economic risk could be visualised, the additional risk of the defendant bringing opposition proceedings and for the opposition to run in parallel with the litigation was also considered together with the risk of later central invalidation of the patent at the patent office.
"Understanding the client’s litigation strategy is a key part of Deminor’s risk assessment when considering a case for litigation funding. Deminor will only invest in cases where the client is taking a commercial approach to the litigation. Any client that is looking for “its day in court” at the expense of considering commercially appropriate offers is a red flag within Deminor’s litigation funding review process. If Deminor cannot be comfortable with the client’s case strategy, then Deminor cannot invest in the client’s case."