HLP3 and patent infringement litigation funding

My post earlier this afternoon here on the IP Finance weblog touches on a subject that straddles the interests of readers of both that blog and this one: the funding (a classic IP Finance concern) of patent litigation (the sole subject of this weblog).  Given the fact that the overlap between the ascertainable readership of the two blogs is so very low, not least since most IP Finance readers are involved in non-contentious matters while those of PatLit are generally from the opposite extreme, I thought it would be a good idea to reproduce that post here and I apologise to anyone who may be seeing it for the second time.  It reads as follows:

How do you finance both the fixed costs and the contingent expenses incurred in the course of patent litigation?  This has long been recognised as a threshold question which, if not successfully answered at an early stage, will usually result in one of two outcomes: either the claimant will decide not to commence proceedings because the prospect of an unsuccessful outcome is unaffordable, or the defendant will not put in a defence since the cost of defeat (and not infrequently even the cost of victory) is not worth risking.  It is therefore with great interest that this blogger read the press release, reproduced below, relating to what is claimed to be the first "turnkey" funding solution for patent owners, at any rate.  The level of interest rose when he saw that his friend and colleague, Olswang LLP colleague Campbell Forsyth, has been playing an active part in its development.

The press release reads thus:

HLP Integration launches the ‘HLP3’ patent litigation funding solution  

The first integrated solution for monetizing patents offered in Europe 

 Leading US litigation support consulting and services company HLP Integration has come together with commercial litigation funder Caprica; ATE [that's "after the event"] risk assessors Thomas Miller; and Olswang LLP  to create the first ever turnkey solution for IP owners seeking to generate revenues from their patents.  

Suitable patents admitted to HLP3 will undergo a robust and thorough process of analysis, expert review and risk assessment involving exhaustive research carried out by HLP; evaluation by Olswang LLP; and a further risk evaluation by ATE risk assessors. Subscribing patent owners will have the benefit of an option, for qualifying patents, to obtain funding from Caprica to take a patent case to court.  

Funding commercial cases in the UK has grown significantly in recent years. Potential litigants seeking funding are normally required to undertake considerable preparatory work in order for their case to be reviewed by funders. This can be very time consuming and costly.  Patent cases are also technically complex and therefore require access to specialist expertise at every stage leading to evaluation by a funder.  

HLP3 is a process designed to allow a patent owner or licensee access to a detailed due diligence report provided by industry leaders at the least possible outlay and risk.  The fact that the HLP3 process is integrated ensures the time involved from commencement of the patent review to clarity as to whether a patent can be successfully litigated is as short as practicably possible ...” 

As I mentioned on IP Finance, the idea of an integrated multidisciplinary approach is attractive and recognises that far more is needed than pots of money, nerves of steel and a bit of actuarial nous.  The question which most interests this blogger is whether, in reverse mode, the same due diligence-driven approach can be applied to the funding of non-patent-owning litigants too, based on an assessment of the extent to which an allegedly infringing product or process is firmly based upon expired patents, information and technology in the public domain and that vague concept which is so often aired in court, "general knowledge".

A further word comes from Campbell Forsyth:

“The HLP3 solution ... has aligned the interests of all involved enabling those with patent rights access to the courts to release the value from their innovations. HLP3 has been designed to fund not only High Court cases but also smaller Patents County Court claims”.

Reference to the British courts will set readers thinking whether, and to what extent, this solution can be applied mutatis mutandis to litigation elsewhere in Europe, particularly if and when the Unified Patent Court is to be the likely forum.

Anyone wanting further information about HLP3 should email Peter Rouse at peter.rouse@hlpintegration.com or give him a call on +44 7737 128174.