Litigation Events: Cost Drivers
March 25, 2015
It’s common sense that the cost of any litigation would increase the longer it runs. Particularly in patent disputes, it’s likewise obvious that certain events in litigation—claim construction, for example, in which key words or phrases in a patent claim are painstakingly scrutinized—are significant indicators of cost.
In a new RPX study analyzing proprietary data from 955 completed NPE litigations, we’ve substantiated, clarified, and shed new light on those assumptions—but our analysis also resulted in a number of less intuitive findings:
- Being in litigation longer as well as reaching or litigating through certain litigation events also are associated with higher settlement amounts, the primary driver of overall costs attributed to NPE litigation. For example:
- Litigations in which a claim construction order has issued resulted in, on average, four times the legal costs and two and a half times the settlement amount as those that did not.
- Litigations that resolved one to two years after filing resulted in, on average, over four times the legal costs and over two times the settlement amount as compared to litigations that resolved in less than a year.
RPX’s full study on NPE Litigation: Costs by Key Events summarizes our research on the correlations between the nature and length of patent litigations and overall costs incurred, both in fees and settlements. We welcome your comments and questions. For further information, please e-mail whitepaper@rpxcorp.com.