How Do I Get Funding for My Patent Infringement Litigation?
Note: Protego, LLC is not a law firm. This content is for general informational purposes only and should not be relied upon as legal, financial, or tax advice. See full disclaimer at the end of this article.
Eight Steps That May Help You Obtain Patent Litigation Funding
Securing litigation funding for a patent infringement case involves multiple steps. While every situation is different, the following is a general overview of the process based on Protego’s experience working with patent owners and funders. This is intended as educational guidance—not a guarantee of any particular outcome.
Step 1: Document the Merits of Your Patent Case
The first step is generally to articulate how the defendant may be infringing on your patent. One of the most common ways to present this is through claim charts—documents that map each asserted patent claim against the features of the accused product or service.
If you are unfamiliar with how to prepare claim charts, there are professionals who can assist. Patent attorneys routinely prepare these documents and can help present a clear and compelling analysis. Protego can help connect you with appropriate resources.
At this early stage, the goal is to demonstrate that there is a reasonable basis for the infringement allegation. As the case progresses, detailed, accurate claim charts will become essential.
Step 2: Identify and Address Potential Risks
A thorough assessment of your case should include identifying potential weaknesses or risks—areas where the defendant might challenge your claims. Common risks may include prior art that could affect validity, claim construction issues, or potential design-around arguments.
Once potential risks are identified, consider how each might be addressed. Being transparent with potential funders about both the strengths and weaknesses of your case from the outset can build trust and help move the evaluation process forward more efficiently. Funders expect that no case is without risk; presenting a candid assessment is generally viewed positively.
Step 3: Engage a Patent Infringement Litigation Attorney
If you have not already done so, this is an important step in the process. An experienced patent litigation attorney can help refine your infringement analysis, develop your litigation strategy, and prepare your case for presentation to funders.
There are several fee arrangement options that attorneys may offer, including contingency (where the attorney receives a percentage of any recovery instead of hourly fees), hourly billing, or hybrid models that combine elements of both. Each structure has different implications for both the patent owner and potential funders, and an attorney can help you understand which approach may be most appropriate for your situation.
Note that some litigation funders have preferences regarding which attorneys or law firms handle cases they fund. In some situations, it may be advantageous to identify a funder before finalizing your legal team, so that you can consider the funder’s input on attorney selection. An attorney can advise you on the considerations involved.
Step 4: Prepare a Comprehensive Case Presentation
A well-organized case presentation is typically the first substantive document shared with a prospective funder after a non-disclosure agreement (NDA) is in place. A strong presentation generally includes the following elements:
- Background of the invention and the patent owner’s company
- Summary of any prior litigation or licensing activity related to the patent
- Clear explanation of how the defendant’s product or service is believed to infringe
- Honest assessment of both the strengths and potential weaknesses of the case
- Preliminary damages estimate, if available
- Information about the legal team and fee arrangement, if in place
- Claim charts and patent numbers
- Estimated litigation budget and financing needs
Understanding what motivates funders can help you tailor your presentation. Funders evaluate cases as investments and are generally looking for a favorable risk-to-return profile. Their evaluation may also be influenced by their existing portfolio and areas of focus.
Step 5: Identify the Right Funders
Not all litigation funders focus on patent infringement cases, and not all have the same evaluation criteria or risk appetite. Working with funders who have experience in patent litigation—and ideally, who have in-house professionals with patent law expertise—can lead to a more efficient and informed evaluation process.
Resources for identifying potential funders include referrals from attorneys, industry associations, online directories, and third-party intermediaries such as Protego, LLC, that specialize in connecting patent owners with litigation funding sources.
Step 6: Evaluate Term Sheets
If a funder is interested in your case, they will typically issue a term sheet outlining the proposed funding amount, repayment structure, and the funder’s expected return. Common structures include a multiple of the funded amount, a percentage of any recovery, or a combination of both.
Because litigation funding carries significant risk for the funder (they receive no return if the case is unsuccessful), the terms may reflect that risk. It is generally advisable to obtain and compare multiple term sheets before making a decision. Terms are often negotiable, particularly when the underlying case is strong.
Litigation funding is commonly structured as a non-recourse arrangement, meaning the patent owner generally does not owe the funder anything if the case is unsuccessful. However, the specific terms of each agreement will govern, and it is important to review all terms carefully.
Litigation funding arrangements may have tax implications. Protego strongly recommends consulting with a qualified tax professional to understand how a funding arrangement may affect your particular tax situation before entering into any agreement.
Step 7: Participate in Due Diligence
After selecting a funder and agreeing to preliminary terms, the funder will typically conduct a due diligence review over a period of several weeks. During this time, the funder’s team will examine the patent, the infringement evidence, the damages model, and other aspects of the case in detail.
The duration of due diligence varies by funder. Some funders in Protego’s network are able to provide feedback relatively quickly, while others may take several weeks or longer. If the funder identifies concerns during due diligence, they may adjust their terms or decline to proceed.
Step 8: Negotiate Final Terms
After due diligence is complete, there may be an opportunity to negotiate adjustments to the terms. If the funder identified risks that were not previously apparent, they may seek additional return to compensate for the added risk. Conversely, if the case appears even stronger after review, the patent owner may have leverage to request more favorable terms.
Once both parties are satisfied with the agreement, the funding arrangement is finalized and the litigation can proceed with the financial resources in place.
Getting Help with the Process
The process of securing litigation funding for a patent infringement case can be time-consuming and complex. Protego, LLC offers assistance in navigating these steps. If you would like to speak with a consultant about your options, contact Protego today for a free, no-obligation conversation.
Disclaimer
This article is for general informational purposes only and reflects the views of the Protego, LLC (“Protego”) team as of the date of publication. Protego is not a law firm and does not provide legal, financial, investment, or tax advice. Nothing in this article should be construed as or relied upon as professional advice. The information presented may not reflect the most current legal developments, and Protego makes no representations or warranties regarding its accuracy or completeness.
Protego does not guarantee that litigation funding will be obtained or that any particular outcome will result from pursuing patent enforcement. All cases are unique, and results depend on the specific facts and circumstances involved. For advice specific to your situation, please consult a qualified attorney, financial advisor, or tax professional.
Protego has a financial interest in matters it presents to funding partners. Fee structure and terms are disclosed in writing before any engagement begins.
Last reviewed: February, 2026