In the majority in the patent litigations, the law firms opt to charge the fee on the hourly basis. However, there is a drastic shift from the hourly or periodic charges to contingency arrangements. While this arrangement can be very profitable to the law firm, it is best that the client is fully informed of the arrangement and what the implications are before agreeing to the arrangement of the patent litigation contingency fee. Generally, these cases are expensive to litigate, take a lot of time to be resolved and the outcome is quite unpredictable.
There are several responsibilities that a law firm can play in relation to patent. These ranges from simple activities like writing demand letters and filing the patent application to more challenging assignments like the litigating the suit. Should the law firm and the client adopt the contingency arrangement, then the litigant is paid part of the proceeds from the successful litigation at an agreed percentage. The normal fee charged for such services becomes invalid in this scenario.
Assume that a client need a demand letter for $120,000 to be written on the contingency fee and that the law firm keeps one third of the proceeds as their settlement, then it clearly implies that should the letter be successful, the law firm takes $40,000. The normal charges for this kind of demand letter is unlikely to exceed $500, As such, the client will have lost $35,000 just because of this arrangement.
In the same way, you can use this logic when filing a patent application. Normally, the legal charge is around $5,000 but can vary depending on a number of factors. However, the client may agree that instead of a direct charge, the law firm waives the fee and goes into a profit sharing deal. Should the innovation be successful, then the client will have to pay in excess of the normal service charge.
In case the said invention does not result to the commercial success as estimated, it means that the law firm that worked on the application for a period exceeding two weeks ends up with no revenue. All this time, the law firm has overhead bills to take care of.
In reality, the quality of the patent does not have the direction in the success of innovation; instead, it depends on the marketing campaign carried out by the innovator. As such, if the innovator fails to market the product, then the law firm stands a chance of losing.
When it comes to the personal injury (PI), it is a completely different case. It is easy to understand why most PI law firms prefer contingency fee arrangements. The issue they are dealing with is the damages, and this implies that the liability is clear. To them, it is more about how much and not whether there is a payment or not.
To worsen the situation, the underlying infringement claims can be reassigned freely. The infringer easily disputes the patent liability through citing the prior art that was not cited by the examiner. This, coupled with the fact that the litigation can take years and the outcome is unpredictable make contingency arrangement more difficult.
There are several responsibilities that a law firm can play in relation to patent. These ranges from simple activities like writing demand letters and filing the patent application to more challenging assignments like the litigating the suit. Should the law firm and the client adopt the contingency arrangement, then the litigant is paid part of the proceeds from the successful litigation at an agreed percentage. The normal fee charged for such services becomes invalid in this scenario.
Assume that a client need a demand letter for $120,000 to be written on the contingency fee and that the law firm keeps one third of the proceeds as their settlement, then it clearly implies that should the letter be successful, the law firm takes $40,000. The normal charges for this kind of demand letter is unlikely to exceed $500, As such, the client will have lost $35,000 just because of this arrangement.
In the same way, you can use this logic when filing a patent application. Normally, the legal charge is around $5,000 but can vary depending on a number of factors. However, the client may agree that instead of a direct charge, the law firm waives the fee and goes into a profit sharing deal. Should the innovation be successful, then the client will have to pay in excess of the normal service charge.
In case the said invention does not result to the commercial success as estimated, it means that the law firm that worked on the application for a period exceeding two weeks ends up with no revenue. All this time, the law firm has overhead bills to take care of.
In reality, the quality of the patent does not have the direction in the success of innovation; instead, it depends on the marketing campaign carried out by the innovator. As such, if the innovator fails to market the product, then the law firm stands a chance of losing.
When it comes to the personal injury (PI), it is a completely different case. It is easy to understand why most PI law firms prefer contingency fee arrangements. The issue they are dealing with is the damages, and this implies that the liability is clear. To them, it is more about how much and not whether there is a payment or not.
To worsen the situation, the underlying infringement claims can be reassigned freely. The infringer easily disputes the patent liability through citing the prior art that was not cited by the examiner. This, coupled with the fact that the litigation can take years and the outcome is unpredictable make contingency arrangement more difficult.
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