Day 1, Panel 2: Trends in Patent Enforcement
26th Annual Berkeley-Stanford Advanced Patent Law Institute
December 4, 2025
B-CLE Recording (CLE: $100) | Agenda | Event Resources | Speaker Biographies
Download the Panel Transcript and Materials here.
Moderator
Steve Carlson, Robins Kaplan
Speakers
Ryan Dykal, Boies Schiller
Courtney Quish, Fortress
Leslie Spencer, Desmarais
Resources
The Survival of U.S. Patent Damages on Appeal – Berkeley Haas
Director Institution of AIA Trial Proceedings
Revision to Rules of Practice Before the Patent Trial and Appeal Board
Lex Machina 2025 Patent Litigation Report Shows 22% Surge in Filings and Record $4.3B in Damages
Program Summary
The panel opened with a broad look at how the patent enforcement landscape has shifted over the past two decades. Leslie Spencer (Desmarais) reflected on the pre-eBay era, when injunctions were readily available and patent owners held significantly more leverage, and traced the gradual erosion of those rights through the AIA, PTAB institution, and increasingly stringent Federal Circuit scrutiny of damages awards. Courtney Quish (Fortress), speaking from the perspective of an investor and lender against patent assets, emphasized that the post-AIA environment made it nearly impossible to rely on a patent as a stable property right, since virtually any party — including newly formed third parties with no standing requirements — could challenge a patent repeatedly. Ryan Dykal (Boies Schiller) added that while the new PTAB leadership under Director Squires has pulled the pendulum somewhat back toward patent owners, it remains far from the enforcement-friendly climate of the mid-2000s. All three panelists agreed that despite recent PTO shifts, the pendulum still tilts toward accused infringers when viewed in the full historical context, and urged the audience not to overstate the significance of recent PTAB changes.
A significant portion of the discussion focused on the practical economics of patent litigation and the growing importance of global enforcement strategy. Ryan Dykal (Boies Schiller) explained that with trial costs running $15–$20 million and the Federal Circuit statistically unlikely to uphold awards above $250 million, there is only a narrow economic window in which a case makes financial sense — generally requiring potential damages of at least $100 million. Leslie Spencer (Desmarais) cited a Berkeley Haas study showing that awards over $500 million are essentially never upheld, and that the realistic “sweet spot” for surviving appeal sits below $100 million, making the economics of enforcement extremely tight. The panel then turned to international opportunities, particularly the Unified Patent Court (UPC) in Europe, which Ryan Dykal (Boies Schiller) praised for its speed (decisions within roughly a year), lower cost (approximately $1 million versus $20 million in the US), and meaningful injunctive relief. Courtney Quish noted that Fortress now strongly favors investments in companies with worldwide patent portfolios, and that even China — long dismissed by patent holders — is beginning to yield favorable outcomes for non-Chinese patent owners.
The panel closed with a pointed discussion on litigation funding and disclosure legislation. Courtney Quish (Fortress) argued forcefully that while disclosure rules aimed at identifying judicial conflicts and standing issues are legitimate, proposed legislation — including the Issa Bill and the Klein Bill — has gone far beyond those purposes and risks exposing the full funding agreements to defendants, who would simply use that information to force plaintiffs to exhaust their resources. Ryan Dykal (Boies Schiller) framed litigation funding as an equalizer that allows smaller patent owners to compete against well-resourced tech defendants, and noted the irony that proposed disclosure legislation has no corresponding requirement for defendants to reveal their litigation budgets. Leslie Spencer (Desmarais) observed that jury research has actually shown that jurors, when aware of litigation funding, tend to award more money — reasoning that larger awards are needed for the inventor to see any recovery after the funder is paid. The panelists collectively cautioned that vaguely written disclosure legislation, if enacted literally, could require disclosure of every individual beneficiary in pension funds that invest in litigation funding vehicles — a result, Courtney Quish (Fortress) noted, that “those on the other side” claim not to intend, to which her response was simply: “Then change the language.”
Key Learning Points
- Damages ceilings are a hard structural constraint. The Federal Circuit almost never upholds awards above $250 million, and the economically viable range for enforcement tops out well below that — requiring practitioners and funders to engineer damages presentations around these statistical realities rather than around what real-world licenses might imply.
- The UPC is rapidly becoming a critical tool in global patent campaigns. Its combination of fast timelines, lower cost, and meaningful injunctive relief makes parallel European litigation a powerful lever for driving settlement in the US, where injunctions post-eBay are rarely available.
- Litigation funding disclosure legislation, as currently drafted, risks going far beyond its stated purposes. Panelists warned that poorly tailored language could expose full funding agreements to defendants or require disclosure of thousands of individual pension fund beneficiaries — outcomes the legislation’s sponsors claim are unintentional, but which the text, as written, could compel.
Program Transcript
Key Terms and Phrases: eBay decision · PTAB (Patent Trial and Appeal Board) · IPR (Inter Partes Review) · AIA (America Invents Act) · Director Squires · discretionary denial · injunctive relief · UPC (Unified Patent Court) · FRAND determination · damages apportionment · Daubert scrutiny · Federal Circuit affirmance · quiet title · prosecution history estoppel · litigation funding · champerty · contingency fee · nuisance suits · standard essential patents · Berkeley Haas study · Lex Machina · Klein Bill · beneficial ownership disclosure · ex parte reexamination · settled expectations · pendulum metaphor · patent portfolio underwriting · case economics · time value of money
This panel, Trends in Patent Enforcement, was the second panel of the first day for the event, 26th Annual Berkeley-Stanford Advanced Patent Law Institute. This event was hosted by Berkeley Center for Law & Technology, UC Berkeley School of Law, and Stanford Law. This panel was moderated by Steve Carlson (Robins Kaplin) with presenters Ryan Dykal (Boies Schiller), Courtney Quish (Fortress), and Leslie Spencer (Desmarais).
[HOST]
Okay. For our first panel here, this was a panel that was, I guess, hotly debated on how to put this together during the construction process about bringing in the idea of patent enforcement in a room that’s often focused on patent defense. So we said, “This is probably the most hotly debated panel I’ve had in my, my career.”
Luckily, we found just a fantastic group to lead this. So Steve Carlson is gonna be our moderator. Steve is a partner at Robins Kaplan, also an adjunct professor at, at Berkeley Law with us.
But Steve is also an international author for I guess European patent enforcement. So we asked him to kick this off, to kind of talk about not just what’s happening in US patent enforcement, but what’s really happening globally and what we can expect if we start seeing an increase in litigation. So Steve, all yours.
[STEVE CARLSON]
Thank you, Wade. I wanna introduce the panel. So Ryan Dikel from the Boies Schiller firm.
Courtney Quish from Fortress Investment Group. And Lesley Spencer from the Desmarais firm. So I wanna talk about the pendulum.
There’s been a lot of swinging in 2025, particularly in the PTO, huge news in the PTO, and that clearly has shifted some factors in favor of patent enforcement. But I want to take a step back, and maybe from a perspective of the heyday, which was maybe the early 2000s before the eBay decision, and I wanna ask our panelists, from that perspective of looking back to those days, and Ryan was almost there in the early 2000s but from this perspective of those days compared to where we are today, even with the current shifts in the PTO, what has been the change in the patent enforcement environment? What is the environment now for bringing litigation campaigns?
So maybe I’ll start on the far end with Lesley. Lesley, what do you think?
[LESLIE SPENCER]
Yeah, I mean, obviously we’ve been talking today, and part of the changes that have happened at the PTAB are obviously the most significant recent change, right at least if you think about US patent litigation. But I think if you think back to the heyday, and I was around back then pre-eBay, when injunctions were available, and that shift was significant.
It made a significant shift in terms of the recovery that could happen during enforcement, and it also led to a number of things, as you could see along the way in time, that allowed for greater and greater opportunity for defendants to push back. The AIA office obviously was one of those things, but in the scrutiny of the Fed Circuit, we’re talking a bit today about things like echo factor and the, the role of federal courts in the Daubert process and scrutiny of what damages expert put forth. All of those changes along the way have made things more and more challenging for patent owners to bring actions and to succeed in the long run.
Flip side that we’ve seen is very large jury verdicts, right? And certain venues where it is certainly seems easier to obtain those verdicts.
That is something that obviously has been a reason why there’s so much you know, concern and maybe even fear in not having the pushback of the IPR available in cases. So there’s been a lot of changes, but if you look at and think about whether the pendulum has swung all the way back with the changes in the PTAB, I think you have to look at the broader context of patent enforcement and say, “Yeah, it hasn’t come all the way back, but it certainly has come to a place where patent holders sit with a greater leverage than they’ve ever had before.” Courtney, what do you think?
[COURTNEY QUISH]
Yeah. I, I will start with where Leslie started. I started practicing in 2004.
Patents were considered to be relatively solid, quiet title. Assumption was once you obtained a patent, you were, you actually owned the patent and you could do things with it. I’m now in the business where we really look at these things as property rights, and we lend money against them. And so, there’s a real importance to having predictability and solidarity and sort of a, like I said, a quiet title.
I think, you know, I came in when there was still a discussion of whether it was champerty or not to have someone, you know, remember that? To have someone sort of paying for a case that wasn’t theirs.
It certainly got the rights maybe went too far. I mean, it was, there was– this is 10 years after kind of the Internet boom, and there’s too many patents. Patent, the Patent Office doesn’t know what to do. We all know sort of what happened there.
Ebay came in. It took away the, the ability to get an injunction, and then you have the AIA.
And I completely agree, there was just this full erosion of rights when it came to predictability and the belief that when you have a patent, you actually can count on that patent for the next 20 years. So, I, I appreciate sort of the jokes, and I’m sure there will be many more throughout the day on, on what these new proposed rule changes will do and what the office has done already, but I do think it’s important to level set kind of where we started.
We are at a place where a patent owner cannot, or at least six months ago, a patent owner could not rely on that patent, and there was no point. It’s not like Europe where you only have nine months to challenge a patent or it’s challenged in an, in a litigation proceeding only, right?
There were so many places where these patents could be challenged over and over again by either an accused infringer or a licensee or just a third party that was created the day before because there’s no standing requirements either. And so you found, you know, every, every building will break down if it’s lit on fire enough times, and every patent will eventually die if it keeps being challenged. And I, you know, that brings us back to a real question here, which is, do we all believe in the patent system or not?
Because if you believe that patents are there to sort of, really support and incentivize progress, then all need to come up with a balanced structure to do it. So I’m with Leslie, I don’t think it’s back to 2004 and 2005. I, I’m in favor of the steps that have been there, because I generally sit on the patent owner side of the equation here. But I, I, I wanna sort of caution at the beginning of this two-day conference to really not over-blow the recent changes in the context of the broader 100-year, you know, multi-100-year history of, of patent rights in this country.
[STEVE CARLSON]
Thank you. Ryan?
[RYAN DYKAL]
Yeah. So, you know, talking about the pendulum, when I was in law school and when I graduated, you know, maybe it was over here. And I recall during that time, you’d see ex parte reexaminations and I can’t think of a single one that actually took the case away completely.
Either you’d survive the ex parte reexaminations or you could amend and continue on with the case. You’d get stayed perhaps.
But over, you know, the past 20 years, so eBay, the lack of injunctions start swinging this way. The Alice decision starts swinging this way, and obviously it got rid of a lot of patents that didn’t need to be out there, but it also gets rid of some patents that maybe, you know, are innovated and novel but, you know, get knocked out on 101.
Uh, the AIA and IPRs, and now, I think over the last 10 years, the Federal Circuit’s holdings on damages have made it extremely difficult to survive. If you just look at Law 360, almost every day, there’s a verdict getting thrown out, 10 million, 50 million. Don’t even try over, you know, 200 million. It’s never gonna get upheld basically.
And so, I think over the past 15 or 20 years, it’s swung very far this way. And so obviously, there’s a new regime at the PTAB and the IPR. It’s a very different world, and I understand that, you know, accused infringers who I represent sometimes too feel that this is a very unfair process, but really if you think about it, it just came back a little bit this way, right? You’re not even close to where we were back in the mid-2000s.
And maybe that’s a good thing, there’s probably a balance to be somewhere in there But I think we’re just thinking about it, you know, from a big picture perspective, you know? It’s not the sky is falling. I think the pendulum is still tilted, I think, towards accused infringers rather than patent owners.
[COURTNEY QUISH]
You know, can I jump in for a minute?
[RYAN DYKAL]
Absolutely.
[COURTNEY QUISH]
Re– remind me, on your agenda, are we talking about this damages issue that Ryan just raised again later?
[RYAN DYKAL]
Yeah.
[COURTNEY QUISH]
Okay. Like, yeah, because that’s a good point that I kind of forgot about. Even if the patents survive, that doesn’t mean much if they can’t be enforced, right? Absolutely. For more than it costs to file that litigation in the first place.
[STEVE CARLSON]
Well, let’s get right on that. I mean, so with damages, with the trend lines and the damages case law, how does that impact the kind of cases you bring and your overall strategy for bringing those cases? Uh, Courtney, you wanna start off with that?
[COURTNEY QUISH]
Yeah, I mean, I think this is it does go back to what do we all want this patent system to be. I just, you know, a patent infringement case these days is going to cost, with the right damages expert and really solid counsel, 15 to $20 million. So you’re asking an inventor that put a lot of time and effort into their small business or their invention itself to put a lot on the line.
And that’s a big chunk of money for most people in this world, maybe not in this city, but in most of the world. And so, it’s a really big burden.
And to think, well, my patent before recent changes could get thrown out X, Y, you know, all of these different places, but then you even get to trial and you win and you still have to go to the Federal Circuit where things get flipped all the time. Even as we heard this morning on things that are arguably supposed to be fact issues, which is a very odd place for the FED Circuit, you know, to put its weight behind.
So I mean, what does that mean? It means that for anyone who’s weighing the risk-benefit analysis, whether it’s a patent owner or an investor or a lender, you have to run sort of just the general risk evaluation. If I think my chances of winning are X, what’s the likelihood that we can get back enough that it’s worth the risk, right?
You have to think about that in the Fed Circuit context, not in the jury context. But that said, I think there’s, I’m just gonna make one more point, sorry, Steve. Like, these numbers are not as high.
We all think they’re high, but if someone’s selling a billion widgets or 10 billion widgets and you are taking a tenth of a percent, you can do the math, it’s still gonna be a really big number. And I’m not sure the Fed Circuit has, like, caught up to the rate of inflation
(chuckling)
and tech volumes in this country or in this world because they’re flipping verdicts that from a number perspective alone, I’m not going to get into each detail of each case, but the numbers aren’t that jaw-dropping.
[STEVE CARLSON]
Now Ryan, what are you seeing in terms of how you bring case and structure your campaigns based upon the damages jurisprudence?
[RYAN DYKAL]
Yeah. So, you know, just the economics of it, you know, if a case costs $20 million to litigate for fees and costs, what sort of case can you take that makes economic sense if you’re doing it on contingency or partial contingency? And the answer is, it needs to have a potential damages of around $100 million or it almost doesn’t make sense. You know, you could possibly run a very lean case and seek less. So that’s one criteria on case selection.
And then you look at the statistics out of the Federal Circuit, and Leslie circulated a document, I forget who did the study, but you can see–
[COURTNEY QUISH]
It was Berkeley, Berkeley Haas, yeah.
[RYAN DYKAL]
Berkeley, yeah. It’s just a absolute drop-off.
You cannot get a judgment affirmed over $250 million period, basically, ever. And so that leaves you, so what can you– You need a hundred million dollars of potential damages to justify the economics of bringing the lawsuit to try to enforce it, and you know if you get a verdict of over 250 million, not to mention the timeline. So typical case, if you’re gonna go all the way through affirmance at the Federal Circuit, five to seven years, so you start to look at the time value of money. It makes it a difficult environment.
And it also leads to some strange things, like, just based on the statistics, you know you can’t put up a number is you know, was just mentioned. If the numbers– let’s say you have real world licenses that are one percent with several licensees.
That seems like a pretty good foundation for a damages model and they were smaller companies. And then you go against one of the FAANGs, and the volume is completely astronomical.
You apply a one percent, you know, to any of these major tech products, and you’re going to come up with a number that’s much larger than $250 million commonly, but you know you can’t ask for that. It won’t get affirmed. The district court judges will get nervous.
And so you kind of sometimes you have to find ways to get the number down. So let’s say you have that one percent license. You could apply it, and you know it’s gonna come out to $750 million. Very difficult ask.
So your damages experts start thinking, “How can I get this number palatable?” And you can you know, apply volume discounts or other things to get the number down, but what you’re also doing is introducing other variables for the Federal Circuit to scrutinize. You know, I’ve been on cases where the Daubert motion said, “These reductions are arbitrary. They’re not based in fact.”
Well, how else are you gonna reduce a number if the real licenses are one percent and you know you have to get the number down? Of course you’re going to start coming up with ways to get it down.
So all that is to say, it is a difficult environment, and the economics kind of dictate there’s a very narrow window, I think, where you can take a case and try to get it through and justify the cost.
[STEVE CARLSON]
Leslie?
[LESLIE SPENCER]
Yeah. Just I think what it comes down to, and we chat about this you know, pre-meet, was you’re still looking for cases that have a solid invention story that can go the ’cause even though you may not have the PTAB, there are gonna be challenges in the district court, higher burden to be sure. But with, you know, if it’s really vulnerable to prior art you’re, you know, the challengers are gonna dig in, right?
’cause they, they know ultimately they, there may be room for them at the Federal Circuit or even at the district court in the, in certain jurisdictions to invalidate the patent. And so I think the dynamics and kind of the decision-making around which cases you can enforce that you think are gonna go the distance has to be pretty much the same.
To, to the point that Ryan and, and Courtney are making though, the, the damages ceilings are, are real. The, the article that Bryan mentioned, sorry, that Ryan mentioned from Berkeley Haas, you know, this is just one set of statistics, but it’s interesting to see. They, they studied Fed Circuit awards and said over 500 million, never upheld.
Over just never. Over 100 million, very rarely upheld, right? To show your point, like, the sweet spot is to stay under 100 million.
That said, the median damages awards was around 35, 40 million that could, you know, would likely survive. Well, to your point, it’s taking you at least 20 to get, maybe to get through trial and appeal. And so the economics looks very challenging, and you still have to be really, really wise about the cases you take and enforce.
You know, we could all debate sure what’s happening there. We can all debate whether the numbers and the billion dollar verdicts are justified and what ways.
But the numbers aren’t as crazy as they may seem. There was another I guess Lex– Lex Machina did their 2025 report.
Looking back at 2024, the total awards was they had said 4.3 billion because at the end of the day, even those large verdicts aren’t surviving. And so to be sure, the changes at the PTAB are shocking, but I think to our point about the pendulum, it’s not quite as dramatic as it may appear.
[RYAN DYKAL]
Yeah. And if I can jump in, you know, one thing to think about, what does it tell you when you can predict the likelihood that a verdict is upheld based on the size of it? What’s that tell you about the Federal Circuit’s process? So coming from the optics of it, perhaps they see large damages awards, they give it extra scrutiny. I think that’s true.
But I think there’s a question about whether they’ve really caught up with the scale of some of these products and tech companies. So YouTube was bought by Google in one of the largest acquisitions ever for $1.6 billion. There are AI companies with, like, three people now that are valued at $20 billion.
And, you know, just the scale of these numbers dictates that valuable patents are going to have higher damages, but it doesn’t seem like the Fed Circuit has really caught up to, you know, the level of inflation and the level of wealth that’s being generated in the technology sector.
[STEVE CARLSON]
Well, let’s turn to the developments here in 2025 with the PTO and the, the rulings by Director Squires which basically he has shut down the PTAB in a lot of ways. Let’s talk, I wanna hear about the impact of that on how you approach case selection, case strategy, and the overall optics of these cases.
Courtney, you wanna start that off?
[COURTNEY QUISH]
Sure. So I, I think it, it doesn’t impact our case selection at all so far. And for what, I mean, just a little bit of background on what we do.
We’re really, we have a huge credit shop, which means we just lend to operating businesses for bridge or growth capital. There’s an, but we are doing that on, just like every other lender looking at someone’s P&L, their, you know, their business strategy, et cetera. We’re just also looking at the patent assets. So there, no real difference.
I think over time, if we see these bear out and that patents have better predictability and a little bit more quiet title, we will be able to lend more or on better terms, because we can just attribute greater value to them. On our private equity investment side, we’re investing in IP holding companies or operating businesses that have meaningful IP portfolios, and those are usually then used, at least in part, for licensing. So there’s a licensing team sitting in those, just like all other private equity investments that go out and do those.
And so for those, you’re, you would say that’s where you’d, you might expect a difference. I, I would say there is not one on the case selection. We are still looking for really high quality patent portfolios, really high quality management teams, very good innovation stories to sort of support and explain the value of the investments.
The only thing that’s different is, of course, part of our underwriting is also time, and time to money, and the cost to get there. So when we make an investment, we end, we make a private equity investment, we also have to allocate a certain amount of money to supporting the operations of that investment, right?
And that includes all the litigation costs and fees, et cetera. And, and, and the time, and of course, if a case goes on for six years, it will cost more than a case that goes on for three. So, there is, there is a change in our underwriting in that if you aren’t in a place where you could see a stall for two or three years, or even longer for these IPRs, California is notorious for it, at least in the underwriting, our modeling can be a shorter timeframe, but who knows what will happen three years from now? So we’re not doing a lot of that because we’re cognizant that these administrations have changed wildly over the last four administrations.
[STEVE CARLSON]
All right. Leslie, what do you think? How’s the PTO changes effect your practice?
[LESLIE SPENCER]
Yeah, I, I do think the, the approach that was taken at the beginning of the year by Acting Director Stewart with respect to the settled expectations and to the extent we can see whether that’s continued to be used and, and the discretionary denials have to be factored in, right? That older patents are gonna more likely survive towards, you know, of, more likely to be discretionarily denied that patents that if there was some reason for the challenger to know that the patent would be used, maybe that’s, you know, a better story in terms of getting an institution. And so you do have to kind of look at the story behind the patent, the factors that are going to lend towards whether discretionary denial is granted or not.
Um, but I think the challenge we have now with, with Director Squires having put in place the, the new institution with respect to him doing it and a panel of three PTAB judges is that we don’t, the decisions now don’t have any reasoning. And so you don’t know, you can suspect that those same factors are being used but you don’t really know what factors are being used. Add to that the what’s in the notice of proposed rulemaking that came out, and I guess the comment period just ended for that, and so we’ll see if that goes into place, but that would require stipulation that you’re not gonna challenge in district court what under 102 and 103 which you would in an PTAB.
And then in that scenario, you know, you’re almost never gonna get anyone bringing a PTAB challenge. And so now does that mean that certain patents that might have been seemed riskier seem less riskier? Sure, sure. But I think all the factors that Courtney mentioned in terms of which ones have powerful innovation stories, which ones are worth the investment to go the, the distance through the Fed Circuit are still gonna be factors you have to consider.
[COURTNEY QUISH]
You still have to remember your damages numbers are gonna be the same.
[STEVE CARLSON]
Ryan, what are you seeing?
[RYAN DYKAL]
Yeah so I don’t really think the PTAB changes are affecting case selection for me in my practice. Similar to Courtney, you know, we look for high quality patents.
We look for a great invention story, something that can resonate with the jury with damages that are adequate to support the economics of bringing the litigation. Um, it’s certainly patent owners certainly see it as a benefit but interestingly though, to, to Leslie’s point the, the stip– the stipulation that you just mentioned, that was supposed to be the trade-off, right? I know that there’s, you know, a lot of accused infringers are very upset with that stipulation, but really, two bites at the apple was not the way it was supposed to be.
If you look at the legislative history, et cetera, with the AIA and the IPR statute. So it’s a little hard to see that it’s that prejudicial when you can still, you know allege invalidity at trial. You can still file ex parte reexaminations. But back to the point, I don’t really think it’s changing the case selection.
What it could have an impact on is timing. Um, so to Courtney’s point, you know, the PTAB regulations and the discretionary guidance has changed wildly from when Biden was in office to now and before, when the first Trump administration was more favorable to patent owners with definitive guidance. So there could be an acceleration of cases. I think a lot of my clients would like to get some of their better cases on file before the next administration comes in and perhaps, you know, the new PTAB changes right back to where it was a year ago.
But I am not seeing cases of less quality that are getting brought. Now that said, I could see an impact on lower value cases the so-called nuisance value cases where they’re not really brought with the idea of going all the way to trial and surviving appeal. I could see an increase in those, because without the IPR process to clean those lower value patents out, you know, now, the cost of defense goes up, the settlement value for a nuisance case could go up. I suspect that’s the case, I personally haven’t seen it, but it seems like that’s a reasonable possibility.
[STEVE CARLSON]
Thank you. Let’s look beyond the US. Uh, there’s been some big developments out there with, especially with the UPC in Europe, the– the Unified Patent Court has now been going for over two years, and we’re seeing some trend lines out of there that are apparently quite favorable for the– the, from the patent owner side. And so, and also Brazil’s making a lot of news with the injunction they’re granting down there.
Even the regional courts in Europe now. There’s a case got filed a few weeks ago where under the long arm jurisdiction that was recognized in 2025, someone actually brought U.S. patents to sue BMW in Munich, oddly enough, right? There’s a lot of bizarre trend lines out there, and it really opens up the chess board.
So, what are you all seeing in terms of, you know, how you plan your campaigns in view of these changes overseas, and would you, you know, use those as the driver of the campaigns in some respect? Courtney, you want to start?
[COURTNEY QUISH]
Sure. So I, again, we don’t, we make investments in companies that do this work. I’m not making frontline decisions on where anything is being filed but I can say from the investment side before the investment is made, we’re absolutely looking at what the opportunities would be, right? Where, so that management has, do they have the options to look at Germany or the UPC or Brazil or China? So, because they are faster, they are less expensive, and they have more teeth.
They don’t have damages, but they do have injunctive relief. But the answer is really that it all depends on who the infringers are, where the industries are, if the jurisdiction is an appropriate place to do that, right? Is it a place that’s meaningful so that it will drive the potential licensee to the table to actually engage in a conversation? And they really aren’t going to do that unless they’re looking at an injunction somewhere, unfortunately.
So yes, the more the better. I’m not really going to comment on one being better than the other. I do think that’s all very patent portfolio specific and sort of product specific.
[STEVE CARLSON]
Yeah. Ryan, what are you seeing?
[RYAN DYKAL]
Yeah. So, the ability to bring a parallel suit in Europe is extremely valuable for a patent owner. You know, one of the first questions I ask in addition to, ‘Is this an open family?’ Is, ‘Do you have UPC patents or German patents?’ And the reason for that goes back to the expense and difficulty of getting a large award upheld in the United States. You know you might be seven years to a judgment, maybe longer, 10 and you’re gonna spend $20 million.
In the UPC, it might be a million dollars, and you get an answer within a year. And I’ve found the process over there to be of very high quality. They have specialized attorneys, specialized judges. When you think it’s probably a weaker case, I’ve seen them, they tend to lose.
And when it seems to be a stronger case, you tend to win. And how that often plays out is, you know, I don’t see anybody giving up a case in the United States because that’s where, usually, the bulk of the damages are.
But in Europe, as Courtney said, you can get an injunction. So often you’ll file two cases at the same time, you’ll move forward in the US, and you watch what happens in the UPC. The UPC comes out in a year.
If that results in an injunction, it has an amazing way of getting a defendant talking to you about a real settlement. Without that, I suspect, you know, most defendants feel like, you know, they know, I assume, the Federal Circuit statistics as well.
They know you can pin in your risk because you know you’re not going to get upheld at a billion, much even far less than that. But with an injunction in play, you know, you kind of have more arrows in the quiver.
[STEVE CARLSON]
Leslie?
[LESLIE SPENCER]
Yeah, I mean, to Ryan’s point, the US market’s certainly the place where you’re able to get damages and where the damages space is largely gonna be the most significant. That said, particularly for standard essential patents, what’s happening in Europe does make you look at that jurisdiction, and maybe first, right?
That you can get a FRAND determination. In the UK now you can even get, it seems, an interim license while they’re deciding the FRAND rate. And so, I think that’s the sort of thing that you’d have to weigh if you’re looking at a campaign that could have enforcement in Europe to say that it may tip in your favor. But, you know, I think to Ryan’s point, you wanna look at a worldwide campaign if you can, and at a minimum, look at the US and Europe to see where those advantages lie.
The injunction obviously creates a great deal of pressure. I think the thing that maybe tipped most recently, and that led to that case being filed against BMW in the Munich court was that decision in BSH that allowed for consolidation of cases in one of the UPC courts against a defendant, right?
And so that gives you some real advantage because back to the time too and cost of litigation, once you, as a patent owner, can consolidate your cases there, you can maybe consolidate in, likely, Texas jurisdiction here in the US. Now you’re not fighting on so many fronts and it’s a real advantage.
[STEVE CARLSON]
Have clients caught up to the UPC? I mean, I– I see often the portfolio, the focus has been the US patents, and yeah, they have one or two patents in Europe, but it’s never been the focus. And what are you seeing with that? And what can you tell clients in order to catch them up to all this?
[RYAN DYKAL]
Yeah. I do think the more sophisticated larger clients have caught up to that. I see them, you know, requesting unitary effect on their patents. There is a debate on whether you’d rather go German national or UPC.
I’ve seen some people advocate for both, take one patent and file an EPC, take one and file it in Germany pretty similar statistics. I don’t feel like the smaller, the startups have caught up maybe, but I could be incorrect. And it may be because, you know, by the time we’re litigating, the startup had filed their patents five or 10 years ago.
Nobody was filing or paying for, you know, European patents at the time if you’re a startup with scarce resources obviously. But–
[STEVE CARLSON]
Yeah. Leslie, what do you see?
[LESLIE SPENCER]
Yeah. I mean, I think that’s fair. In terms of the EP, I think the EPO has always had the ability to challenge, at least for the first nine months, the validity. And so, I think there is a sense of there’s what’s called tougher talents to get through, particularly software patents in the EP, and so maybe people were less likely to go there in the first instance than the US. And then obviously a US-based company would look towards the US first for patenting.
And so, I do think It’s only just now that particularly patent owners and maybe smaller companies would understand that there’s some real advantages to having the protection in Europe and that would allow in the event of bringing a suit, to be able to act more quickly and see recovery a lot more quickly than they would in the US.
[STEVE CARLSON]
Hey, Courtney, what are you guys doing from a portfolio management standpoint? Are you getting a lot of patents in Europe? Are you opting in, staying opted out? What do you–
[COURTNEY QUISH]
Think? Yeah. Well, two things. When we’re looking at investment, we’re absolutely, we are strongly weighted on those that have worldwide portfolios. No question there.
I think that anyone that we’re talking to who had a real business, so they had the resources to pay, they were filing and when it came to the opting in for those that were existing, we actually recommended doing both but keeping some because we didn’t know, right, when it first came to be. So if there was sufficient volume, we really strongly suggested opting out and then just opting a few in. Maybe as we start to see what happens, we would change that recommendation. But I think it’s hard.
I mean, look, like this all comes back to when people are filing these. If they’re smaller shops, they don’t have the resources to file all over the place and that just makes this a hard call. But if you can, you really should spread them out because the changes that are happening here are also happening in other places in the world.
I mean, for the first time ever, one of our investments is actually seeing success in China and they are not a Chinese company. And that’s shocking. I think for a long time, we all kind of blew off China entirely.
So, you know, different countries are doing different things because they think it helps support their own innovation system.
[RYAN DYKAL]
Yeah. And one thing to consider, too, on UPC and Germany my understanding, and I’m not an expert, but there’s no ability to get discovery to shore up your infringement contentions. You have to have it upfront. And so, certain inventions and technologies lend itself to patent coverage in the UPC and patent enforcement, things that you can observe, things you can collect. Whereas it’s more difficult if you’re not sure, you know, if something’s going on in a server somewhere, you know, you may have a strong inference and maybe you have enough to survive the pleading stage in the United States and get discovery and examine source code.
I don’t really think that’s a thing in the UPC. So, there is a different scope of what you can do.
[STEVE CARLSON]
All right. Let’s talk about litigation funding. It’s been a hot topic clearly in the lobbying world, and eyes are off the litigation funding industry. certain courts, Delaware in particular, have special rules about litigation funding agreements. How does it–
[COURTNEY QUISH]
One judge in the Delaware.
(laughter)
[STEVE CARLSON]
She’s a judge. Thank you. How does this play into your world in, what kind of cases are good for litigation funding? Which case are not? And how do you strategize around it? Ryan, you want to start it off?
[RYAN DYKAL]
Sure. You know, the criteria I find with litigation funders is similar to our criteria. The economics have to make sense.
And kind of the rule of thumb is, it possible we could put up a damages number of around $100 million or more? Without that, the economics probably aren’t gonna work. I have participated in some, you know, discussions where it’s a smaller case, maybe it’s 50, and you can maybe try to run it very lean and maybe make that work.
Below that, I think it’s very difficult. But I think, you know, from our perspective, at least on the plaintiff’s side, we view it as first it lets the law firm de-risk some rather than taking it all on contingency. Almost always it’s partial contingency, right? You might get 50% of your rates.
Let’s say it’s a $20 million budget, $3 million in costs, $17 million in fees. Generally, the structure is 50%. You get 50% of your fees.
So, if it’s a $17 million total fee budget, they’ll budget eight and a half for fees and you get 50% of your standard rates, and your contingency percentage gets decreased similarly. So, let’s say if you took the case on full contingency, it’d be, you’d want 40% to justify it.
If you get litigation funding, more or less you give up half your contingency and you get half your rates paid. So, you’re not killing it. You still are very highly incentivized to win and get a good result. But the funder needs a return on their capital and if they’re outlaying, you know, $10, $12 million, the justification needs to be the same economics that you’d look at the case if you’re taking it on full contingency.
[STEVE CARLSON]
Yeah. Leslie?
[LESLIE SPENCER]
Yeah. All of what Ryan said applies in terms of taking into consideration the share for litigation funding. I think the challenge is sometimes, and to your point about the disclosure rules, which is when the funder is known I think that frankly alters the type of settlement conversations and maybe how soon it happens, right? And I think that’s the sort of thing that, maybe is what’s tried to be encouraged in Delaware. Unclear.
But I think what we found too, and we chat about this as a group, that at the end of the day, in front of juries, that kind of information actually maybe doesn’t help, right? They actually kind of expect that someone has to pay for the cost of litigation and that there’s a funder doing it.
Doesn’t make them think that the award should be less. They often, often look at that and say the reward should be more because the poor inventor in their view, won’t get his share unless you, you have a larger award.
So it kind of cuts both ways with the disclosure requirements I think it really does come down to, you know, obviously all funders are not created alike and Courtney can speak to that and that, to the extent that how large a share that is and how it’s affecting the economics of the settlement discussions is probably the biggest driver in terms of does it make sense to use funding or doesn’t it and which jurisdiction you’re likely to end up in.
[STEVE CARLSON]
Yeah. Courtney, I know you’re in the crosshairs in a lot of this discussion here–
[COURTNEY QUISH]
I know.
[STEVE CARLSON]
So I don’t want to put you on the spot, but you know, what are, how does it affect your world, this whole thing?
[COURTNEY QUISH]
Yeah, no. I have very strong views on this. So I, the stated reason for disclosure of funders or ownership in a, or, or any sort of beneficial owner is how some of this now, or, or any person that benefits.
All right, there’s two of them. One is conflicts for the judge so the, so the court can assess whether there is a conflict and under Rule 7.1 and local rules that are tied to it. The other is standing.
Both of those are completely legitimate arguments but, but the request and the transparency efforts, whether it’s Judge Conley or others, has, has just gone way too far. Proposed, there’s legislation proposed right now both from Darrell Issa in, you know, Southern part of California and although that just got dinged and failed last week, and then the Klein Bill which is moving forward, though from what I hear won’t, won’t make it into law. And those, those go far.
So what you see in, in Northern District of California or Middle Dist– Central District of California, I’m not sure what the Southern District does, is, is a requirement that anyone that passes a certain threshold should be disclosed, right? And then if it’s litigation-funded, I think that’s a brand new rule, there has to be a disclosure.
But it’s just who and it’s if you’re, if you exceed 20 or 25, I can’t remember what it is, percent, then you have to be disclosed. That’s fair, right? That helps identify conflicts for the judge and, and it, and it gets through. But it’s not giving away information that is going to tip the scale on the discussions or the litigation.
It won’t prejudice the court or the jury. What people are looking for is even more. They want the, the transparency legislation that I don’t think one is going to go anywhere now, wanted disclosure of the entire funding agreement, which means a defendant will get to know exactly how much money a plaintiff has available. And what will they do?
Well, they will force you to spend $1 more. And, and there’s no legitimate basis for why someone needs to know what that number is.
Now, is there an argument on standing on that? Maybe.
But that’s a very specific thing and probably doesn’t require disclosure of the entire agreement. So I think there’s this disingenuous mismatch on sort of why people say there should be disclosure and what they’re really looking for.
And my final point on that is on the ownership side. There’s now this, there’s a real point like we want to know every owner.
Well, do you, in, in our investments, who are the owners? They are massive state and federal pension funds.
But the way the legislation’s written is that it says every individual should be disclosed. So does that mean I now have to disclose every teacher or firefighter or university worker because that’s the language of the legislation?
And those on the other side would say, ‘Well, that’s not what we mean.’ And my response is, ‘Then change the language.’ Because the defendants in these cases will absolutely push forward and I don’t see any benefit to that other than harassing the investors and the members of the pension funds underneath it. So I think we all need to, there’s this conversation of intent versus written, and I’m like, “We’re all lawyers in this room.
We all know that intent doesn’t matter. What’s on the page matters.”
So you know, think of all of these as you go through. The Klein Bill that’s existing right now is all about foreign investors. But there’s no threshold. It doesn’t talk about all the legitimate foreign investors that pour money into this country, and I don’t quite understand why we would be disincentivizing foreign investment in the United States.
It actually kind of is a real head-scratcher for me. So as you’re all watching these state or federal legislation come through, keep that in mind.
[RYAN DYKAL]
Yeah. And I kind of view litigation funding, it’s kind of an equalizer, really. You know, often the defendants have incredible, unbelievable resources.
You know, the profits some of these tech companies make daily is just astronomical and often the patent owner is a smaller company, a startup, usually a smaller company, and so the litigation funding is a way for them to get high-quality representation to go up against the massive war chest. And to Courtney’s point on disclosure, you know, where I see no bills on the other side where the defendant needs to disclose their litigation budget, right?
Why not? It’s, if that’s the purpose of it.
And in to the point of getting to the individual level, the standing argument makes sense. The conflicts argument makes sense.
But the language is where it’s tricky and even in Delaware that rule, I think you have to go up the chain until you hit a corporation.
[COURTNEY QUISH]
No, a person.
[RYAN DYKAL]
A person.
[COURTNEY QUISH]
Or a corporation or a person.
[RYAN DYKAL]
Or a person.
[COURTNEY QUISH]
Mm-hmm.
[RYAN DYKAL]
And so many of these, you know, these are funds and hedge funds and private equity. A lot of them are organized as partnerships. Why do you need to know the name of a limited partner three levels up at some hedge fund? There might be hundreds of them.
They have, they may not even know, you know, the individual cases they’re invested in. They might not even know they’re invested in litigation funding.
So I think the rule needs to be tailored more carefully if that’s the true goal. And then one point that Leslie made which I do find amusing in, of the trials I’ve had over the past several years, if you’re on the plaintiff’s side, assumption is you’re using litigation funding.
Not always true, but often. And the defendant almost always tries to get the fact that litigation funding is being used into the jury trial. They think that it would poison the jury and they think that’s bad, but recently, I think the American– American Lawyer did a poll or they talked to a jury consultant who did a poll, and when potential jurors find out that litigation funding is used, they award more money. Which is funny because I’ve always fought to keep, you know, as plaintiff we don’t want litigation funding in, the defendant wants it.
Well, now, I’m starting to think maybe we do want this in because you have to get more money to pay off the banks and the lenders to make this case happen and, you know, if you’re representing a smaller company versus a mega corporation, then maybe that’s not a bad fact.
[STEVE CARLSON]
Well, to bring it back to the news of 2025 with the change of the patent office, with respect to litigation funding, are now, I know it’s new, maybe you haven’t had the conversation yet, but is there a broader swath of cases now that funders are stepping up to fund? Now that the PTAB has dialed its activity down?
[COURTNEY QUISH]
Courtney Quish I, I think to Ryan’s comment r– uh, much earlier in this conversation that there will be these smaller, there will be more smaller, maybe quote-unquote “nuisance suits”, I think you will– you’re going to see that. I agree with that.
I wish it weren’t true because it gives everyone an excuse to use the troll word because, you know, they like to put everyone in one place, but those nuisance suits will increase, and they probably will have some funding. I don’t– on the other hand, a lot of funders have kind of fallen away in the last few years and I don’t know if they’re around to fund those. And certain funders, you know, much like our shop, we won’t look at those kinds of cases anyway.
So, yeah, you’re gonna see a little bit more for sure. I hope it’s not enough that we can come back to the world of the trolls.
[RYAN DYKAL]
Leslie.
[LESLIE SPENCER]
Yeah, I don’t– the nuisance suits, I suppose, are always gonna be there and not only the change of the PTO but even AI has allowed for generation of complaints and claim charts in a way that certainly probably proliferates. A little more of the legal cases. That said, I think those are easier to sniff out as well and I’m not sure that’s is what would cause consternation for a potential defendant.
It is the notion that in, over the course of a litigation, not having the tool of PTAB as a lever to pull and that’s your first lever for an inflection point is really at the Fed Circuit. Changes dynamic and you’re gonna spend more money.
It just impacts, I think the real, despite the fact that the AIA was intended to decrease the cost of litigation, I think the real impact is that we’re probably gonna see cases that go longer and more expense on litigation, and I’m not sure anyone wants that. And that’s I think it’s sort of the real challenge is how do we get to a place where we are protecting the rights of patent owners and we’re encouraging innovation, but we’re not doing it in a way in that we’re just sucking money away to no end and not really identifying the really strong patents. And I don’t have great answers on that But I do think that’s kind of where we sit right now.
[STEVE CARLSON]
Well, you brought us right down to the wire, so thank you all. And thank you.
(audience clapping)