News & Insights from Hou Zhu 240708

• Chambers and Partners has released the Chambers Litigation Support Guide 2024.¹ The rankings for major players in litigation funding are as follows:

• Band 1: Burford, Litigation Capital Management (LCM), Therium, Fortress, Omni Bridgeway;

• Band 3: Profile Investment, Tenor Capital. 

   

• Band 1: Burford, Parabellum, Fortress, Omni Bridgeway;

• Band 2: Bench Walk, Longford;

• Band 3: Delta, GLS Capital, Statera, Therium, Lake Whillans;

• Band 4: Curiam Capital, The D.E. Shaw Group, TRGP Capital. 

   

• UK-wide:

• Band 1: Bench Walk, Harbour, Therium;

• Band 2: Burford, Woodsford;

• Band 3: Asertis, LCM, Balance Legal Capital, Omni Bridgeway;

• Band 4: Orchard Global, Erso Capital, Fortress. 

   

• Europe-wide:

• Band 1: Deminro, Nivalion, Omni Bridgeway;

• Band 2: Burford, Fortress;

• Band 3: Bench Walk, Therium, LitFin;

• Band 4: Foris AG, Profile Investment;

• Band 5: Kapatens AB, Advofin, IVO Capital, Litigium Capital AB, Qanlex, Stonward, Woodsford.

   

• Australia: 

• Band 1: LCM, Omni Bridgeway;

• Band 2: Harbour, Therium, Balance Legal Capital, CASL, Woodsford;

• IMA Media deputy editor Adam Houldsworth recently wrote an article titled The Unified Patent Court will revolutionise patent litigation funding 6, where he explains the impact of the establishment of the Unified Patent Court on the litigation funding market:

  • Overview: The establishment of the Unified Patent Court (UPC) and the unitary patent system is the most radical shake-up in the history of the European intellectual property system, and it seems that it will completely change the global patent litigation funding landscape. Industry experts believe the new system will not only expand the litigation funding market and increase strategic options for patent owners but may also shift the market's center of gravity from the dominant US to Europe.

• Fragmented traditional European market: Before the establishment of the UPC and the unitary patent system, European litigants received less third-party funding compared to the US which traditionally attracted larger funding due to its market size and potentially large claims. Germany has been the main jurisdiction for patent litigation funding in Europe due to its relatively large market size. In contrast, France saw fewer funded cases due to lower litigation costs, while Spain and Italy’s lengthy litigation processes posed a challenge for funders. This fragmented nature of the European patent litigation landscape made it uneconomic for funders to litigate country by country, especially in smaller markets. 

• UPC as a game changer: The UPC and the unitary patent system cover 17 EU member states (including Germany, France, and Italy), creating a market size comparable to the US. This is expected to change the previously fragmented European patent litigation landscape. The UPC increases the potential damages for European patent owners, simplifies the claims process, and offers strategic advantages such as the possibility of obtaining Europe-wide injunctions.

Industry experts agree that the speed of UPC decisions will be a significant attraction. Infringement cases are expected to be heard on the merits within 12 months of filing, and preliminary injunction requests have been heard three to five months after filing, with decisions handed down shortly thereafter. Additionally, UPC litigation is expected to be more cost-effective than US litigation.

• Funded UPC cases: Katharine Wolanyk, Managing Director of IP Finance at Burford, revealed that Burford is already funding at least one UPC lawsuit and has identified double-digit UPC cases to review. She expects this number to continue growing. Emily O’Neill from Deminor mentioned that most of the UPC opportunities they are reviewing have a US component, and she believe that if the a UPC case can get a quick result (for example, within a year), it can be used as leverage in US litigation.

• UPC funding will grow: Experts agree that third-party funding for UPC litigation is likely to grow significantly over time. James Blick, co-founder of Erso Capital, noted that the UPC will be of great significance in the future, but it is still early days, and we need to wait and see how it will process certain procedural and legal issues. Some decisions on the merits are likely to be released this summer, which could spark greater interest in the UPC market.

The growth in funding will also depend on the level of understanding and acceptance of UPC and funding in this area by European law firms and patent owners. For example, although many US companies have European patents, they tend to take a US-centric approach and only knows UPC for its existence but still have questions about its operation and benefits. Compared with US law firms, the European law firms’ understanding and use of litigation funding still has a lot of room for improvement. 

• Adjustments in strategy for funders: Given that past patent litigation has been predominantly centered in the United States, litigation funders should establish new and closer ties with European law firms to ensure they can secure the best litigation lawyers for UPC cases. The varying regulations regarding the practice of law across European countries also require funders to explore collaborative solutions with lawyers within the existing regulatory frameworks.

Additionally, Blick noted that another significant difference in the operation of the UPC is the greater demand for litigation insurance. The insurance market is closely related to the litigation funding market, especially in Europe, as cases will face adverse cost risks, which are often best addressed through insurance.

[3]参见：https://litigationfinanceinsider.com/p/legal-finance-international-funds-nakiki-se-defence-costs

[6]参见：https://www.iam-media.com/report/special-reports/q2-2024/article/the-unified-patent-court-will-revolutionise-patent-litigation-funding