As an intellectual property lawyer and a registered patent attorney I handle a full range of intellectual property issues in my practice including patent, trademark and copyright infringement actions, intellectual property portfolio evaluation and protection, and drafting and evaluating patent license agreements.

Here are 10 ways to control and reduce costs in patent litigation.

1. Prosecute patents thoroughly and diligently – The main defenses available to an accused infringer are invalidity and non-infringement. It is very difficult for an infringer to invalidate a patent with prior art that was before the patent office. Therefore, identify and submit as much prior art to the patent office as possible during prosecution, such as through the U.S. Patent and Trademark Office (PTO’s) accelerated patent prosecution process.
2. Competitor patent portfolio review during product development/design
 – The best way to reduce (if not eliminate) the costs of patent disputes is to avoid them altogether. During the development/ design phase for a new product, have the patent counsel review competitors’ patents to make sure your new product does not infringe. It is always easier to implement design-arounds before the product is manufactured and on the market.
3. Patent litigation insurance for defendants and plaintiffs – Patent infringement liability insurance covers defense costs and if included in the plan, judgments and settlements up to predefined policy limits. Enhanced damages for willful infringement typically are not covered. Patent enforcement litigation insurance (also known as abatement coverage) typically covers the patentee’s litigation costs enforcing the patent and costs of defending against invalidity (but not antitrust) counterclaims, usually less a percentage co-payment by the insured.
4. Accused infringers should assess risk early and often – Assess whether your customers have been sued or may be sued (indemnities) and whether a patent lawsuit will affect your future sales (that is does your competitor own the patent or have a license?). Determine what is a standard royalty rate for licenses in your field. Determine what is your maximum exposure (damages, attorney fees, lost sales and so on). Also try, if possible, to ballpark reasonable settlement figures. Exposure and settlement figures will help you determine your litigation budget. Revisit these calculations at various stages of the litigation (after fact discovery, claim construction, summary judgment and so on).
5. Always discuss actual and projected costs for the various phases of the litigation during status calls – This will prevent any ‘surprise’ legal costs and help the client allocate funds for projected legal costs.
6. Document Retention Policies – Instituting effective document retention 
policies before litigation (before you know or have reason to know you will be involved in patent litigation) is the number one way a company can reduce its costs in patent litigation. 
Having good policies in place that are followed by all of your employees and implemented by IT as drafted can reduce your litigation budget substantially and affect the outcome of your case.
7. Designate key technical and financial/accounting personnel to support litigation efforts – Often times, the amount of time it 
takes lawyers to find key personnel and analyze documents can be drastically reduced if they have in-house assistance. Assigning key technical and financial employees to support the litigation efforts helps outside counsel understand who is/was involved in product design and sales and where the key documents are located.
8. Vet your counsel wisely 
- Just because patent litigation is expensive, doesn’t mean it has to be prohibitively so. Interview a few different firms; find out the range of hourly rates at each firm (including paralegal time). Find out who will be doing the work. Often times the experienced partner you meet during the interview process will not be the one who does the lion’s share of the work – he or she may not work on your case at all. Find out hourly rates for all levels of work. Get a proposed detailed budget from the firms. Ask for a breakdown of costs for the various portions of the case so as to plan for future expenditures properly. Ask who will be spending the majority of the hours at each phase of the case. Obtain resumes and evaluate experience. Ask about estimated or projected expert fees.
9. Just because it is litigation does not mean it has to be ugly – Try to keep an open and cordial relationship with the other side and its counsel. Contentious litigation is always more expensive than litigation between parties that are trying in earnest to have the court resolve their dispute. Once things get ‘personal’ between the parties or their counsel, the litigation bills increase substantially. In cases where the parties and/or their lawyers get along, you can cut your litigation costs drastically in comparison to cases that are very nasty/contentious.
10. Settlement: Talk often and think outside the box – Litigation is a dynamic process – the parties’ positions change at various 
stages of the litigation due to
party documents produced during 
litigation.

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