Patentees’ Legal Strategies at Risk Under US Litigation Funding Disclosure Bill, Experts Warn

Litigation funding experts expressed concerns about new legislation requiring disclosure of litigation funding agreements, considering it overly broad and unnecessary. Finnegan partner Erik Puknys, told IAM, "It's a one-size-fits-all solution to a problem that I don't think is really all that widespread, so I'd rather not see the litigation passed." "Whenever Congress steps in, purporting to fix a problem that is maybe not as big of a problem as it seemed at first, it tends to create more problems than it solves."

Erik, who represents patent challengers said he understands why patentees want to keep information secret, but his view is that a defendant is entitled to receive the information. "If there is a situation where I'm a defendant and I think a meritless case has been brought against me, but there's a nominal plaintiff who is judgment-proof and it's deliberately set up that way, I absolutely want to know that information. I deserve to know."

Erik noted that the legislation could help the defense counsel in their litigation and settlement strategy - understanding the value of a patent in damages calculations - but disagrees that it will tip them off about the patentee's legal strategy. "It may give you hints, but that's no different than any other kind of non-privileged information," and concluded, "district courts seem to be able to root out abuse of the litigation process and deal with the situation on a case-by-case basis."

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