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In the majority in the patent litigations, the law firms opt to charge the fee on the hourly basis. However, there is a drastic shift from the hourly or periodic charges to contingency arrangements. While this arrangement can be very profitable to the law firm, it is best that the client is fully informed of the arrangement and what the implications are before agreeing to the arrangement of the patent litigation contingency fee. Generally, these cases are expensive to litigate, take a lot of time to be resolved and the outcome is quite unpredictable.
There are several responsibilities that a law firm can play in relation to patent. These ranges from simple activities like writing demand letters and filing the patent application to more challenging assignments like the litigating the suit. Should the law firm and the client adopt the contingency arrangement, then the litigant is paid part of the proceeds from the successful litigation at an agreed percentage. The normal fee charged for such services becomes invalid in this scenario.
In order to understand the arrangement better, take a scenario where you approach the law firm to write a demand letter that is expected to result to a proceed of $180,000 under the contingency arrangement. If the agreement is that the litigant (law firm) keeps 25% of the proceeds as the fee, then you expect that $30,000 remains in the hands of your litigants. Considering that the client pays about $500 as the fee for the same letter in the normal arrangement, there is a loss on the part of clients.
The logic is the same in the application. Most law firms will charge around $5,000 for this service. However, it the charge is waived and they go into the arrangement, then the litigant shares the innovation profit. Ideally, the client is likely to pay much more if the innovation is a success.
It is also possible that the innovation fails to yield the expected commercial success. In this case, it means that all the work that went into drafting the application which may run into weeks is simply a loss on the part of the law firm. The overhead bills will still be accumulating regardless of the arrangement the firm goes into.
In reality, the quality of the patent does not have the direction in the success of innovation; instead, it depends on the marketing campaign carried out by the innovator. As such, if the innovator fails to market the product, then the law firm stands a chance of losing.
When it comes to the personal injury (PI), it is a completely different case. It is easy to understand why most PI law firms prefer contingency fee arrangements. The issue they are dealing with is the damages, and this implies that the liability is clear. To them, it is more about how much and not whether there is a payment or not.
To worsen the situation, the underlying infringement claims can be reassigned freely. The infringer easily disputes the patent liability through citing the prior art that was not cited by the examiner. This, coupled with the fact that the litigation can take years and the outcome is unpredictable make contingency arrangement more difficult.
There are several responsibilities that a law firm can play in relation to patent. These ranges from simple activities like writing demand letters and filing the patent application to more challenging assignments like the litigating the suit. Should the law firm and the client adopt the contingency arrangement, then the litigant is paid part of the proceeds from the successful litigation at an agreed percentage. The normal fee charged for such services becomes invalid in this scenario.
In order to understand the arrangement better, take a scenario where you approach the law firm to write a demand letter that is expected to result to a proceed of $180,000 under the contingency arrangement. If the agreement is that the litigant (law firm) keeps 25% of the proceeds as the fee, then you expect that $30,000 remains in the hands of your litigants. Considering that the client pays about $500 as the fee for the same letter in the normal arrangement, there is a loss on the part of clients.
The logic is the same in the application. Most law firms will charge around $5,000 for this service. However, it the charge is waived and they go into the arrangement, then the litigant shares the innovation profit. Ideally, the client is likely to pay much more if the innovation is a success.
It is also possible that the innovation fails to yield the expected commercial success. In this case, it means that all the work that went into drafting the application which may run into weeks is simply a loss on the part of the law firm. The overhead bills will still be accumulating regardless of the arrangement the firm goes into.
In reality, the quality of the patent does not have the direction in the success of innovation; instead, it depends on the marketing campaign carried out by the innovator. As such, if the innovator fails to market the product, then the law firm stands a chance of losing.
When it comes to the personal injury (PI), it is a completely different case. It is easy to understand why most PI law firms prefer contingency fee arrangements. The issue they are dealing with is the damages, and this implies that the liability is clear. To them, it is more about how much and not whether there is a payment or not.
To worsen the situation, the underlying infringement claims can be reassigned freely. The infringer easily disputes the patent liability through citing the prior art that was not cited by the examiner. This, coupled with the fact that the litigation can take years and the outcome is unpredictable make contingency arrangement more difficult.
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