The cost of patent litigation

Patent litigation is expensive. The AIPLA’s 2007 Economic Survey

reports that the median litigation costs per side for a patent

infringement lawsuit when less than $1 million dollars is

at risk is $350,000 through the end of discovery and $600,000

through disposition; when $1 - $25 million is at risk, $1.25 million

through the end of discovery and $2.5 million through disposition;

and when more than $25 million is at risk, $3 million

through the end of discovery and $5 million through disposition.

The largest component of these costs is attorney’s fees but the

numbers also include expert witness fees, travel costs, and document

management and production costs. Importantly, these

costs do not include time spent in-house by corporate counsel

and employees supporting the litigation.

The patentee (usually the plaintiff) has the luxury of controlling

the largest component of its costs (attorney’s fees) up front by

hiring counsel on a contingency or mixed-fee basis. So while

many of the cost-savings measures described in this paper will

apply equally to the patentee or accused infringer, the patentee

can mitigate a large portion of its expenses by entering into alternative

fee arrangements with its counsel.