According to the American Intellectual Property Law Association, the average copyright litigation costs $310,000 to defend rights valued less than $1M. When value of the copyright rises to between $1M and $25M, the average costs rises to $850,000.
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Patent litigation costs $767,000 to defend the rights valued at less than $1M. When the value of the patent rights rises to between $1M and $25M, the average cost rise to $2.6M. For the well-prepared software owner, this creates unusual opportunity.
Of course, costs will vary widely depending on many factors. For example, litigation strategies can narrow the scope of the claims pursued to help control litigation costs. For small business, the cost and complexity of software litigation make enforcing or defending against claims of infringement very difficult. When faced with such potential expenses, some small intellectual property owners may increase their marketing and sales budget. They hope to beat their competition in the marketplace, rather than in court.
Threat of legal action: threat of ongoing legal defense fees
One value of a patent or trademark is the cost for your competition to defend against it.The large average costs of enforcing intellectual property hint at the underlying value of a patent or copyright. When you threaten patent infringement or copyright infringement, you threaten not only the future outcome of the litigation, but also, the present and ongoing costs of the litigation. A well-prepared intellectual property holder can increase the costs to the defendant, whose insurance policy likely excludes protection for intellectual property infringement.
Also, a well-prepared intellectual property owner can sometimes avoid lawsuits and chill the competition’s behavior without resorting to litigation. When the appropriate legal work to secure copyrights and patents has been done prior to the software infringement, a demand letter is more likely to avert the competitions behavior. A strong demand letter includes the copyright registration or the patent grant. A demand letter without the software registration or patent grant is weak and risks being ignored.
Contingency-Fee IP Lawyers
Lawyer prepared software copyrights and software patents can enhance your opportunity for a contingency fee lawyer.
Some lawyers share the risk of the outcome with their client, that is, the lawyer is only paid if they win. A contingency fee lawyer is usually paid a percentage of the final software litigation award. A contingency fee lawyer has to be selective about the cases he brings, that is, contingent fee lawyers need to spend time on the cases most likely to win. So, when seeking a contingency fee lawyer, lawyer-prepared copyright registrations and patent grants can help you obtain affordable, contingency-fee counsel.
Before you can enforce your patent, the U.S. Patent Office must grant your software patent claims. The process of enforcement has four stages. First, the filing of a patent application. Next, a software engineer employed as an Examiner at the U.S. Patent Office will review your application and make additional requirements. Upon successful review, the patent will be granted. Finally, a lawsuit may be filed against a competitor who makes, uses, or sells the claimed software invention.
Intellectual Property Enforcement Insurance Policies
Most insurance companies specifically exclude coverage for defense or enforcement of software rights or intellectual property. The available insurance polices are specialty lines with specific underwriting requirements. Sometimes, an opinion of counsel may be necessary to obtain such coverage. While the selection of a IP Policing Insurance policy should be made on a case-by-case basis, lawyer-prepared copyright registrations and patent grants may be required by the underwriter. We recommend seeking legal advice for your specific situation prior to beginning the underwriting process for these special lines of IP Policing Insurance Policies. In essence, these policies are a type of hybrid of pre-paid legal services and contingent-fee lawyering.