Why is it Important to Create a Patent Portfolio “Worthy of” Contingent Fee Representation?

In my last post, Why You Should Consider Contingent Fee Representation, I generally discussed the types of patent cases that are appropriate for contingent fee representation and the benefits of a contingent fee representation to a patent owner.  Not every patent licensing or enforcement case is suitable for a contingent fee representation agreement.

As a contingent fee patent attorney, I have evaluated hundreds of potential matters over the last decade. Only a small percentage have met our criteria for contingent fee representation.

Potential client inventors and patent owners have invested countless hours into developing an invention, and perhaps a small fortune prosecuting the patents for the invention and marketing an associated product.  Another company comes along with better marketing or name recognition and captures the market while infringing the patent. The potential client is now forced to assert its patent but does not have the resources to pay an hourly firm potentially millions of dollars to assert their rights.

In most of these potential cases, there are numerous problems make it impractical to take the case on a contingent fee basis.  In some cases, there may be nothing “wrong” with the patents; however, the liability for infringement or other issues are not as clear as they could have been.  While not fit for a contingent fee agreement, the case may be a great case to take on an hourly rate agreement.  Unfortunately, the client is not in a position to pay hourly, and the claim is not enforced.

With a little more planning during the initial patent prosecution, problems are addressed before they become uncorrectable or would create considerable uncertainty for a contingent fee arrangement.  Steps can be taken to craft the case for infringement, to minimize defenses to infringement or attacks on validity, and to combat issues actively when raised.

If you prosecute your patents from the beginning with an eye toward contingent fee enforcement, you can keep open as many options as possible.  Should you end up in a situation where the only option you have for enforcement is a contingent fee arrangement—you will be more likely to find a lawyer willing to take your case.  Further, if hourly rate lawyers enforce the patents, you can likely minimize the lawyer fees.

In my next post, I will discuss the high-level attributes we look for in a contingent fee patent matter.