Litigation Financing on Bull Run
by: Tom Hochstatter, President
Source: Westfleet
I wrote back in February about the notable uptick in 2021 in overall Patent Litigation financing - post pandemic (here). Well, recent research and analysis from Westfleet Advisors shows how the litigation funding industry is here to support those specific trends.
Is it a “cart” or “horse” situation?
While total Litigation Funding was up in 2021 to a record AUM of $12.4 Billion the headline for us here at Techson was the notable rise in allocation to Patent Litigation funding. Patent Litigation funding represented nearly 30% of all litigation funding in 2021, but was a full 61% Higher than 2020’s benchmark. This signals a renewed interest in investing in the sophisticated monetization of patents.
Techson has expanded its IP Consulting & Strategy practices to now include patent monetization and we are seeing an acceleration from the world’s largest patent holders and individual inventors alike with a renewed interest in creating (more immediate) financial value for their hard earned patents. The historical “prosecute and hold” strategies of old are giving way to “ROI on Innovation” and “Maintenance Cost Reductions” strategies of right now. Whether it’s a pivot away from a tech sector rendering a portfolio non-core or a desire to simply not renew patent maintenance as a cost cutting measure, more and more patents are coming on the market. And, those patent holders are in need of experienced transactors to help them meet their financial goals.
Furthermore, we are seeing a maturation of the (Patent) Litigation Funders extending their investment reach to include smaller investment opportunities, or moving down market. There just aren’t enough home run patent litigation cases to support all the recently raised capital to be deployed at a pace that the LPs accept. This, and we know from analog investment industries such as Venture Capital that a diversified investment portfolio will deliver the highest returns.
Burford Announcement
Just this week, Burford announced the closing of a new $360 Million fund - the Burford Advantage Master Fund LP. It will focus on smaller and faster to returns opportunities.
“The Advantage Fund focuses on lower risk, lower return pre-settlement litigation investments than we include in our core legal finance portfolio, targeting matters expected to produce returns in the 12-20% IRR range. The Advantage Fund fills the gap between the Burford Alternative Income Fund, which focuses on lower return post-settlement investments, and Burford’s core business.”
This announcement will be followed by others in the sector to take full advantage of the “long tail” of litigation financing investment opportunities. We will be right there with dozens of these small and mid market opportunities from our clients looking to make the most (and the fastest) of their hard earned patent portfolios.
The industries and technologies we are representing right now are:
Fossil Fuel to Clean Energy transitions - Grid Scale Batteries, Diesel to Electric Fracing, Waste Water Mgmt.
Cannabis / Terpene - from Cultivation to Production to Consumer
Alternative Clean Fuels - Hydrogen Fuel Cells
Medical Devices: Heart Care
We’d love to help your firm maximize its ROI on Innovation by expertly monetizing your entire patent portfolio. We have global reach now and an ever growing network of credentialed Buyers, and (all important) Financiers. Shoot us a note: info@techsonip.com to learn more.