The Rise of Contingent Fee Representation in Patent Litigation

It is well known that plaintiff-side contingent representation is on the rise in patent litigation. But why? And what are the lawyers in the field like? Although scholars have studied contingent litigation in other contexts — such as medical malpractice, personal injury, and products liability litigation — patent litigation has received almost no attention. This gap in the literature is unsettling because patent litigation is different from these other fields of contingent litigation in important and interesting ways. These differences include: patent litigation is much more uncertain; the costs of litigating claims are usually significantly higher; and patents, including their underlying infringement claims, are freely assignable. Absent in most other contingent litigation contexts, these characteristics of patent litigation shed light on the broader topics of litigation and contingency relationships in general. Drawing upon several sources of data, including in-depth interviews with over forty lawyers involved in contingent representation in patent litigation and examination of over forty contingent fee agreements, this Article provides the first comprehensive analysis of the rapid evolution of contingent representation in patent law. The development of contingent representation includes top-tier litigation firms recently transitioning to taking on high value contingent cases, small entrants representing plaintiffs in lower value cases, and numerous general practice firms experimenting with contingent patent litigation. These diverse players each select and litigate cases using varied methods, resulting in different levels of risk and reward. The Article uses the study of these players to discuss how and why attorneyclient contingent relationships established in the nascent marketplace of patent contingent litigation differ from other types of contingent litigation, and what patent law can teach about contingent representation in general. It also lays the foundation for future quantitative research comparing the results of contingent and hourly billing representation. ∗ Assistant Professor of Law, Chicago-Kent College of Law. I wish to thank David Hyman______________________, and the participants at the 2011 Patent Conference at the University of Kansas Law School, the 2011 IP Scholars Conference at DePaul University College of Law, the Fueling Innovation Conference at the University of Missouri-Kansas City School of Law, the Marquette IP Colloquium, and the Notre Dame Law School and Chicago-Kent faculty workshops for their helpful comments and insights. 2 CONTINGENT FEE PATENT LITIGATION [10-Feb-12 DRAFT – WORK IN PROGRESS ABSTRACT ................................................................................................................... 1.................................................................................................................. 1