Litigation funders seek to bankroll intellectual property disputes against big tech firms, new research shows

Eight of the UK’s ten biggest litigation funders are now seeking to bankroll intellectual property (IP) disputes, according to new research from IP specialists Mathys & Squire.

Litigation funders, whose business sees them finance lawsuits with a view to taking a cut of any winnings, are increasingly looking at IP disputes as a means of making money.

In particular, litigation funders are seeking to finance small startups in their efforts to sue large US tech firms for trademark infringement, amid claims the big tech firms are copying startups ideas, Mathys & Squire said.

The firms see an opportunity in funding smaller companies in fighting their lawsuits on a “no win, no fee” basis, against large multinationals with developed legal teams and deep pockets.

In one such case, Apple was ordered to pay the California Institute of Technology $838m in 2020, in a dispute over wifi technology.

In 2016, Californian pharma giant Gilead Sciences was also told to pay Inedix Pharmaceuticals $2.54bn, following a battle over drugs for Hepatitis C.

Mitesh Modha, director at litigation funder Woodsford said: “Tech giants often assume a small startup won’t have the resources to pursue a potentially expensive and time-consuming patent infringement case. Litigation funders are increasingly enabling David to fight back against Goliath.”