RPX’s patent insurance offers companies unique patent risk protection, combining traditional claims-paying policies with litigation-prevention and low-cost litigation resolution services. Read on to see how RPX’s solutions have saved clients time and money in avoided patent litigation and settlement disputes.
RESULT: ~60% SAVINGS ON CASE RESOLUTION
Negotiated License Ends Litigation at Fractional Cost
RPX data and intelligence provided key negotiating ammunition to secure speedy case dismissal for our client—avoiding protracted litigation potentially costing millions of dollars with no guaranteed outcome.
Our client, a leading networking company, was sued for patent infringement along with more than 50 other defendants. A growing number of those companies were settling, emboldening the plaintiff.
We connected the client with Panel Counsel selected by RPX, and helped to secure a fee arrangement that included a cap on legal costs of $15,000. RPX then provided Panel Counsel background on the plaintiff—based in part on RPX’s first-hand experience—as well as proprietary data and information establishing the asserted patents’ fair market value.
Panel counsel used this intelligence to end the litigation in less than 90 days, securing a licensing settlement for 27% less than the price paid by other, uninsured peer defendants. Use of Panel Counsel resulted in savings about 90% in legal costs. The resolution saved our client more than $250,000 in legal and settlement costs and potentially millions on unpredictable litigation.
Result: Zero-cost outcome
Assertion Letter: No-Engagement Strategy Prevails
Companies typically spend tens of thousands of dollars on the investigation and resolution of patent assertion letters. In this matter, RPX investigated and assisted in the management of such a threat, leading to a zero-cost resolution.
Two clients—an e-retailer and an online marketing company—reported that they received patent assertion letters from the same NPE threatening multimillion-dollar litigation. RPX immediately responded, using its proprietary patent and litigation intelligence to quickly determine the scope, nature, and credibility of the threat along with detailed background on the plaintiff.
While the assertion letters had at first appeared to be credible, RPX’s comprehensive analysis revealed that the patent claims at issue did not apply to the targeted RPX clients. Rather, the plaintiff had sent assertion letters to dozens of online retailers, likely fishing for quick licensing dollars that they hoped to generate based on fear of its past successes.
RPX’s pre-litigation recommendations solidified in-house counsel’s no-engagement strategy, which has succeeded to date; no related follow-up lawsuits have been filed. The speed and quality of RPX’s response saved its clients an estimated tens of thousands of dollars typically spent for outside counsel to investigate, manage, and resolve an assertion letter.
Result: ~55% savings on case resolution
RPX Intel Defuses Claims, Enabling Low-Cost Licensing
Facing a lawsuit targeting its flagship product, our client obtained a license and speedy end to litigation through RPX claims management. Without RPX, our client could have paid more than two times the legal fees and settlement costs.
The suit against our client—a leading cloud communications entity—was one of many that the plaintiff filed against many companies over the same patent involving telephone calls using a data network.
RPX immediately assessed and provided insight into not only the relevance of the technology and patents at issue, but the plaintiff’s motivations and past settlement strategies. Panel Counsel—retained through RPX to represent the client for a reduced fee—used this intelligence to shortcut negotiations, secure a licensing agreement, and close the matter in less than 120 days, with legal costs limited to less than $12,000.
RPX estimates that the client would have paid more than two times the legal fees and settlement costs had it not been insured with RPX.
Result: Zero-Cost Resolution
Acquisition Ends Litigation, Protects Startup’s IPO
Our client was sued for patent infringement in an action that threatened its plans to go public. RPX facilitated a resolution within 60 days that enabled our client to avoid all legal, settlement, and transaction costs, and to proceed with its IPO.
A successful telecommunications startup, our client filed a claim with RPX as soon as the lawsuit hit. Already familiar with the plaintiff, RPX identified the suit as part of a larger campaign against many companies, and decided that buying rights to the asserted patents would be the most efficient, cost-effective way to clear any litigation and further risk.
Within 60 days, RPX negotiated and finalized acquisition of the rights to the asserted portfolio and licensed all relevant RPX clients—ending the litigation at no cost to our insured.
This client was focused on speedy resolution, given budget restrictions and its imminent IPO. Through its resolution with RPX, the company disposed of the matter quickly and without retaining outside counsel.
Result: Low-cost resolution
Facing First Infringement Case, Company Avoids Expensive Legal Tie-up
As an RPX insured, our client paid minimal defense costs—less than $3,700 total—to resolve litigation in just 95 days, preventing what could have evolved into a nearly $2 million, unpredictable litigation.
Having no experience with patent litigation, our client faced pressure from two angles. Its outside counsel recommended fighting back hard and litigating at a cost of up to $2 million. Meanwhile, the plaintiff was pressing for an early settlement, with a threat of a much steeper demand later if our client refused.
RPX provided an alternative solution, negotiating a defense budget capped at $5,000 with our recommended Panel Counsel—a law firm that knew the venue, plaintiff, and judge and would cooperate with RPX on a fast, low-cost resolution strategy.
The arrangement with Panel Counsel enabled our client to sharply minimize litigation expenses while RPX pursued rights to the asserted patent and related portfolio. RPX finalized a cost-efficient, group-licensing transaction that ended the litigation not just for this policyholder but all relevant RPX clients.
Result: Acquisition Saved
RPX Policy Reassures Acquiring Company After Startup Receives Assertion Letter
A software startup was just a week away from being acquired when its CEO received a patent assertion letter. The acquiring company insisted the threat be resolved before closing. Investors in the startup recommended intervention by RPX. RPX’s solution: an insurance policy placed in the acquiring company’s name to provide the protection necessary for the deal to proceed.
Patent risk is a common obstacle for today’s technology M&A deals, complicating late-stage discussions and often resulting in exorbitant escrow carve-outs well beyond typical for transaction-related liabilities. Traditional representations and warranties insurance does not have the capability to consider and manage this risk effectively, and usually excludes patent coverage altogether.
RPX Patent Insurance provides the risk transfer needed to minimize escrow requirements and protect investors and founders. In this case, the CEO of the acquisition target—a vertical market SaaS startup—initially wanted to engage outside counsel to deal with the assertion letter. An investor in the startup suggested first reaching out to RPX.
RPX quickly evaluated the threat and provided insurance coverage that protected the acquiring company not only from the assertion letter risk, but also from other related exposure that might evolve post-transaction. The solution satisfied the acquiring company, clearing the way for the transaction to close. At the same time, the exposure of the selling company, and for their investors and founders, was capped—and their proceeds from the transaction protected.
To learn more about our insurance offerings, please call us 1.866.779.7641