Intellectual Property

2023 IP Futures Bets

For our purposes, the multistage event of interest will be developments in the IP world in 2023.

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intellectual property law

(Image via Getty)

Welcome to 2023. For my first column of 2022, I took a look back at 2021’s IP developments, at least as reflected in the columns that I had written over the course of that year. For 2023, I prefer to look forward, by thinking about the probability of certain events occurring in the IP world in the year to come. To help guide our efforts, we can adopt a predictive betting approach that is a staple of the burgeoning sports gambling marketplace, namely, the futures bet. For those who are unfamiliar with what futures bets are, here is how they are defined by the good folks at DraftKings: “A futures bet is a bet on the outcome of a multistage event such as a season or a tournament.” For our purposes, the multistage event of interest will be developments in the IP world in 2023, or at least my idiosyncratic choices about what I think would be interesting to see in the year ahead.

As an easy example of a futures bet in a sports betting context, gamblers will often be given the opportunity to wager before a given season starts on certain potential outcomes, such as whether the Knicks will make the playoffs. Another popular alternative is a bet on how many wins a team will earn that year. Sticking with the Knicks, the over/under for their 2022 win total was set by certain sports books at 38.5 wins. If someone took the over bet, they would be betting that the Knicks would win at least 39 out of 82 games. And if you thought the Knicks would underperform, you could take the under, which would mean that you were betting that the Knicks would win 38 games or fewer. That will be it for my gambling tutorial. On to our 2023 IP futures bets.

For our opening futures bet, I think we will continue to see a migration of high-powered IP litigation groups moving from Biglaw to boutiques. We had some examples of note in 2022, and I think it will be interesting to see if this is a trend that has legs in 2023 and beyond. For betting purposes, I will set the over/under of new IP litigation boutiques started by former Biglaw partners at 5.5 for 2023. Yes, it is a bit arbitrary to write off boutiques started by younger lawyers or lawyers coming from outside of Biglaw, but I believe that two of the biggest drivers of the recent Biglaw to boutique phenomenon are most often encountered by existing Biglaw IP partners. The first driver to leaving Biglaw is of course conflicts, which are endemic to practicing in Biglaw and are not always offset by the cross-selling or other advantages afforded experienced lawyers for staying onboard their Biglaw firms. Second, the increased role of litigation funding in IP disputes should continue to allow a select group of lawyers to set up their own boutiques to handle funded cases, just as Biglaw refugees were once known to attract contingency work back when contingency IP litigation was a less risky endeavor. If I had to bet on this one, I would take the over — meaning I expect that we will see six or more IP boutiques started by former Biglaw partners in 2023. Should be interesting to see if that bet is a success.

We can continue with the litigation funding theme for our next futures bet. We all know that much of the pending big-ticket patent litigation is backed by litigation funders. That includes cases where the patents being asserted were home-grown by a once or current operating company, as well as patents acquired by NPE’s of various stripes, including patents acquired from leading technology companies. To this point, it has been challenging for defendants in funded cases to determine how proactive they should be in terms of even seeking disclosure around the presence of funding in their cases, much less with respect to engaging with the funder itself as part of a potential settlement approach. Our next futures bet, therefore, will be whether we will see any publicly announced settlements in 2023 between a litigation funder and a company that they have funded IP litigation against. To be clear, I am not talking about settlement of funded cases — those deals will continue to happen between plaintiffs and defendants in due course. Instead, I am referring to the more challenging scenario, where a sophisticated litigation funder is able to reach agreement with a sophisticated IP defendant on how to value litigation peace between their two entities. For this one, we can set the over/under at 1.5 — and while I think these types of deals will one day become more commonplace, I am skeptical that the raw nerve endings engendered by the current state of play will be soothed enough to see more than one example, if that, of funder/IP defendant public harmony in 2023. It is the under bet for me on this one.

We can end off with a futures bet on the number of greater-than-$100 million verdicts we see in IP cases in 2023. One of the consequences of increased litigation funding, buttressed by the option for certain funders to insure the principal of their litigation investments, is that IP plaintiffs are better resourced than ever to take their cases to trial. And when IP cases go to trial, big verdicts are almost always in the potential offing, especially for funded cases — since they attract the funding based on their big damages potential in the first place. Moreover, throughout 2022 we started to see a number of big IP verdicts granted in cases involving NPE’s, which should further encourage funded NPE’s to try their luck at trial in cases where defendants are unwilling to pony up settlement amounts sufficient to make settlement attractive. Let’s set this over/under at 6.5, which would put us at a big trial verdict every other month. I’ll take the over, because I think there are enough high-value IP cases in progress that will get to trial in 2023, both because of the presence of funding, as well as the continued unwillingness or inability of IP defendants to proffer workable settlement amounts in funded cases.

Ultimately, while futures betting can be a fun exercise, it is also a useful tool for thinking about what really matters in a given multistage event going forward. Placing futures bets also offers a handy measuring stick for testing how well our current thinking will align with actual future developments. Feel free to let me know whether you will be taking the over or under on the futures bets I propose, or whether you think there are other futures bets that the ATL IP Column Sportsbook — located in beautiful Brooklyn, New York — should be taking action on.

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And lastly, here’s to a healthy, productive, and peaceful 2023 for this readership.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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