Why Patent Litigation Is a Natural Fit for Financing

Rose Acoraci Zeck of Bloomberg Law notes that the high patent damages awarded in 2021, such as the $2.2 billion finding against Intel, are spurring additional investments in the space and predicts that in 2022 we will also see an expansion to funding patenting licensing, as funders seek to diversify their investment portfolios with stakes in licensing entities. Read more.

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Burford’s ‘Timing’ Loss Shows Litigation Funders Need Patience

Burford Capital’s $72 million annual loss—the first in its history—shows the risk litigation funders face in growing their caseloads while the Covid-19 pandemic slowed court dockets, delaying payoffs for investors. Burford last year invested $447 million in cases, about twice the $225 million it deployed in 2020, the company said in its annual report. But with fewer cases being decided through trials and settlements, payoffs from those investments—and others made in prior years—weren’t realised. “Burford turned in an excellent 2021,” the company’s chairman, Hugh Steven Wilson, said in a March 29 statement disclosing results. “This may seem odd to say as we report the first loss in our history, but that is a matter of timing.”

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Big Law Warms Up to Litigation Finance as Deals Pot Hits $2.8B

Litigation funding companies in the U.S. committed $2.8 billion toward new deals in 2021, according to an annual survey by Westfleet Advisors. This represents an 11% increase from the prior year and can be attributed in part to rising interest from the world’s biggest law firms. While more money was spent overall, the average size of deals has declined by around 20% since 2020 to $6.5 million. The survey showed that new funds have popped up specialising in smaller deal sizes.

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Out of Prison and Broke, Wrongly Convicted Sell Their Cases

The proliferation of litigation funding in the U.S. has extended to civil rights claims brought by the wrongly convicted. Some funders are willing to provide exonerees as much as $1 million in upfront cash. Recently, Chicago-based exoneree Charles Johnson received $226,000 from Illinois after serving 22 years for a crime he didn’t commit. With funding from Validity Capital (at their cost of capital) and represented by his lawyers at Kirkland & Ellis, he was able to successfully sue the City of Chicago and its police department in 2018.

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Never miss a thing in the litigation finance market.