A Morrison & Foerster study finds intellectual property litigation is becoming more complex, riskier, and international in scope, nearly doubling in 15 years. The Benchmarking IP Litigation 2019 study, a look into the current state of intellectual property (IP) litigation, says that IP litigation spend has skyrocketed.

Blurring the lines

The report was developed from in-depth interviews with top IP legal decision-makers from 53 companies with at least $750 million in revenue to better understand IP litigation trends, including spend, types of matters, jurisdiction, and management. The report covers detailed findings and commentary from these decision-makers, along with guidance and key considerations for companies as they determine their global IP strategies. The study found that although companies are handling a decreasing number of IP matters, spending on IP matters is growing as they becoming increasingly larger, complex, international, and multijurisdictional in nature. The average exposure for large companies in “bet-the-company” cases is over $1 billion, with the high end at $2 billion. Maturing patent courts in Europe and China are becoming popular outlets for disputes, and new technology has blurred the lines between industries, subjecting companies to risk and challenges from new sources.

Key findings

Annual spend on IP Litigation matters continues to increase, growing from $1.7 billion in 2005 to $3.3 billion in 2019; annual growth rates have recently slowed but continue at double-digit rates. While spending has increased, the number of matters that companies are managing is down 27 percent, from 15 matters on average in 2015 to 11 matters on average in 2019; Matters are more complex and riskier, with nearly one out of five being classified as “Bet-the-Company” (4 percent) or “High-Risk” (15.1 percent). An additional 48 percent are reported as “Complex or Significant.” Seventy percent of new matters are now being filed outside the U.S., and 64 percent of IP litigation decision-makers see matters filed outside of the U.S. as riskier and more challenging; and When asked how they expect IP litigation to change over the next three years, nearly 20 percent of respondents said they expect bigger, more complex, and riskier litigation.

Global approach

“As litigation becomes more significant, complex, and multi-jurisdictional for companies, top IP legal decision-makers need to adopt a global approach to IP, stay abreast of developments in key jurisdictions, and partner early with counsel who can provide sound advice quickly to minimize costs and risks,” said Richard SJ Hung, co-chair of Morrison & Foerster’s Intellectual Property Practice Group. The study can be found here.