5 minutes with... Eric Carlson

You oversee Burford’s patent investment pipeline. What do you see as the key factors that influence a successful investment decision in the patent space?

A successful investment decision in the patent space is the product of deep industry experience and a multi-layered analysis that leverages legal expertise, technical expertise, financial considerations and practical experience. At the core of the decision-making analysis are the three substantive pillars of just about any patent infringement case: patent validity, patent infringement and patent damages. Wrapped around this core are several layers of additional considerations, including the trial story’s strength, the trial counsel’s track record, the relationship between plaintiff and defendant, the economic incentives that particular deal structures create and the venue’s impact on the litigation. Successful investment decisions weave all these considerations together into a holistic analysis.

This said, patent litigation is filled with uncertainties and requires active management. Thus a successful investment decision in the patent space actually involves several decision points—an initial decision whether to make the investment followed by a series of mid-investment decisions to navigate uncertainties, adapt to changed circumstances and to ultimately optimize investment resolution.

Burford is well positioned to make these decisions. Our patent team is incredibly experienced and now includes seven members focused almost exclusively on evaluating, structuring and managing investments in the patent space.

In your experience, what risks or challenges are most frequently encountered in patent-related litigation, and how do you advise clients to mitigate them?

Patent litigation is inherently risky. Indeed, sometimes it feels like there are near infinite ways to lose a patent case. Some specific, recurring areas of risk include litigating patents across parallel proceedings (a result in one forum can impact litigation in another), navigating validity risk at the Patent Trial and Appeal Board (historically, it has found a majority of the patent claims it reviews to be invalid), constructing damages models to withstand district court and Federal Circuit scrutiny (the law around patent damages is constantly evolving) and grappling with unrealistic expectations (a failure to fully appreciate the unique risks presented by patent litigation often leads to suboptimal results).

To mitigate these risks, patent owners must be mindful of them at the outset, affirmatively structure a patent assertion strategy with risk minimization in mind, hire experienced counsel capable of effectuating the strategy and ensure that they have access to sufficient capital to allow them to see the strategy through to final resolution.

In addition to providing capital, Burford routinely works side-by-side with clients to develop optimal strategies and manage ongoing litigation.

How is the use of legal finance evolving in patent disputes, and what trends are driving that change?

Legal finance is a natural fit for patent litigation. I expect this to continue to hold true for the foreseeable future. Patent litigation is expensive, risky and often takes several years to resolve. Thus, patent holders often seek a legal finance risk-sharing partner to help them see their patent dispute through to resolution.

Some specific patent litigation trends we are seeing that underscore the need for legal finance include frequent multi-venue litigation, the advent of the Unified Patent Court (UPC) and an increase in corporate divestitures. While these specific trends might drive the need for patent litigation capital in this moment, I expect the broader trend of legal finance playing a significant role in patent disputes to remain constant.

How has the growing trend of patent divestitures impacted the way businesses assess the value of their intellectual property?

This is a significant, growing trend we are seeing in the market. Corporates are increasingly realizing that their intellectual property does have significant value, even if they do not have the internal resources or expertise to directly monetize their patents—and a legal finance partner like Burford can work with businesses to provide a bespoke outsourced monetization solution, instantly breathing significant value into intellectual property that had been relegated to a sunk cost or otherwise forgotten. 

While some corporates have already awoken to these possibilities, others are slower to adapt. This said, I expect that the number of corporates exploring patent divestitures will continue to grow year over year—the value proposition is simply too compelling to remain on the sidelines.

 5… ways you spend your free time?

1.    (Happily) shuttling my kids to various activities. I have two awesome daughters, 9 and 6. My oldest is just getting into competitive swimming and my youngest is currently enjoying gymnastics and basketball.

2.    Keeping up with the news, from technology to global politics. A current topic of particular interest is the blistering pace of advancement in the artificial intelligence realm.

3.    Exploring the Chicago restaurant scene with my wife. A current favorite is Mi Tocaya Antojeria in the Logan Square neighborhood.

4.    Obsessively following Illinois Fighting Illini sports, particularly basketball and football.

5.    Sometimes… nothing. I find that occasional unscheduled downtime is necessary to recharge my battery.