Why Patent Litigation Funding Is a Smart Move for Small and Medium Businesses
Enforcing a patent can be a high-stakes, high-cost battle, especially for small and medium-sized businesses (SMBs). Legal fees can easily run into the millions, and many patent owners are forced to choose between protecting their intellectual property or investing in business growth.
But there’s a smarter path forward: patent litigation funding.
This powerful financial tool allows SMBs to enforce their patents without depleting internal capital. Instead of shouldering legal costs alone, businesses can partner with third-party funders who cover the expenses in exchange for a portion of any judgment or settlement. The result? You can protect your IP and reinvest your own resources into growth, R&D, or operations.
What Is Patent Litigation Funding?
Patent litigation funding is a form of non-recourse financing where a third-party litigation funder pays the legal costs associated with enforcing a patent. These funders typically evaluate the strength of your case and the potential return before providing funding.
If the litigation is successful, through settlement or court award, the funder takes an agreed-upon portion of the proceeds. If you lose, you owe nothing.
This approach shifts the risk away from the business owner, making patent enforcement accessible even without deep pockets.
Why Traditional Litigation Is Cost-Prohibitive for SMBs
Litigating a patent infringement case can cost anywhere from $1 million to $5 million or more, depending on the complexity and duration of the case. For SMBs, those legal fees represent a massive resource drain, often diverting capital from product development, hiring, or expansion.
Many innovators end up settling for less, licensing their patents under pressure, or letting infringement go unchecked, simply because they can’t afford to enforce their rights.
This is where litigation funding for small businesses changes the game.
The Benefits of Litigation Funding for Patent Owners
Here’s why more SMB patent owners are turning to litigation finance:
🔹 Enforce Your Rights Without Depleting Capital
Litigation funding allows you to assert your IP without tying up your own balance sheet or cash flow.
🔹Reinvest in Core Business Activities
Keep your capital working, whether it's for product innovation, sales, marketing, or hiring, while a funder covers your legal costs.
🔹 Non-Dilutive Financing
Unlike equity financing, litigation funding doesn’t require you to give up ownership or control of your business.
🔹 Level the Legal Playing Field
Third-party funders can give you access to top-tier law firms and expert witnesses, putting you on equal footing with well-funded infringers.
How Litigation Funding Lets You Reinvest in Your Business
Think of it this way: Every dollar you don’t spend on litigation is a dollar you can allocate to growth. Whether it’s expanding your sales team, launching a new product, or entering a new market, litigation funding preserves your working capital so you can keep building your business while pursuing justice.
In a competitive landscape, your patent might be one of your most valuable assets. Funding gives you the freedom to enforce it without compromising your growth trajectory.
Is Litigation Funding Right for You?
If you:
Own a strong, enforceable patent
Are facing infringement from a larger entity
Want to protect your IP without draining your budget
...then patent litigation funding may be the strategic tool you need.
The bottom line? SMBs no longer need to choose between enforcing their rights and fueling their business. Litigation finance offers both protection and potential upside—with less risk.
Ready to Enforce Your Patent Without Sacrificing Growth?
Explore your options for patent litigation funding and find out how to keep your capital focused on what matters most: building your business.
