In the language of business we use the terms “legal” and “liability” as though they are inexorably linked. But for companies seeking to protect and defend their intellectual property against infringement, litigation should be viewed as an asset - sometimes yielding extraordinary, non-recurring windfalls that drop to a company’s bottom line.
Few CEOs think this way; they focus on the core business of competing and simply want IP obstacles knocked down. Even if successful IP litigation brings substantial one-off monetary benefits, neither management nor investors adjust their valuation of companies based on such inflows. Litigation expenses are, therefore, considered a cost rather than an investment.
And the costs to litigate can be substantial. To lose a case can result in a significant drag on profits. Management, therefore, needs to prioritize and decide whether pursuing an uncertain case should divert funds from CapEx, new product development, and growth initiatives. It can be a difficult call.
Now, through Litigation Finance, companies have a way to "lay off" litigation risk while maintaining a majority of the upside that comes from a favorable settlement.
Dulany Street Capital provides non-recourse investment finance in meritorious IP cases. It’s all we do.