Each patent infringement case is unique, with different technologies, different parties,
different damages and different dynamics. Despite these differences, I frequently observe
that most patent disputes are conducted with the same one-size-fits-all approach. Regardless of whether realistic damages are $100 thousand or $100 million, most patent disputes are
conducted using traditional litigation practices that include several rounds of written discovery, numerous fact depositions, exchanges of thousands of documents, e-discovery, Markman hearings, expert reports, expert depositions, various motions, hearings and trial. All of this costs the parties millions of dollars and requires significant court resources. Although alternative dispute resolution procedures such as mediation are sometimes successful in resolving patent disputes, they are frequently done too late in the
litigation process to significantly reduce costs. Too often, by the time mediation occurs most
discovery has been done and the related costs already have been incurred.

In many cases, the costs of litigation consume much or all of any damage award. From 2006 through 2011, the median patent damage award was $4 million,ii and the reported average cost of litigation was $2.5 million (nearly 2/3 of the median award). However, these reported costs include only the external costs of litigation. They do not reflect the significant internal resources expended by the parties (such as internal time and energies to respond to discovery requests and to attend depositions) or the impact of uncertainties and
disruptions that may be caused to a party’s business by pending litigation. Therefore, the
true cost of litigation is much higher than the reported average costs.

Too often, even for parties with the resources to pay these litigation costs, the potential benefits do not justify the cost. For parties without sufficient resources, these litigation costs make dispute resolution, and patent enforcement, inaccessible. In other words, in some cases, nobody wins. However, there are alternatives to these costly practices.

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