les Nouvelles - September 2008

Price Your Case: Expected Value Calculations In Patent Litigation

Scott Bechtel

President, Amicour International, Lafayette, IN, USA

Ray I. Throckmorton

Executive Vice President, Amicour International, Lafayette, IN, USA

When a complaint is served, most defendants ask, “Can I win?” The ability to qualify the risks related to litigation is often challenging. Some may even call it next to impossible to do, but this is exactly what litigants should attempt to do when managing patent litigation. A second question also asked by both parties is: “How much will this cost me?” Whether the parties are math oriented or not, natural human instinct includes sizing up the odds and estimating the costs. This whitepaper suggests that case probability analysis can be done more accurately by applying some basic mathematical principles. Doing so results in better decision making. This said, in order to evaluate risk more accurately, two core areas of expertise must morph together in order to compute an accurate result. First, a proper balance of legal acumen must inform the analysis; and, second, the statistical calculations must be performed correctly. In other words, even if you have the legal part right, case managers must be able “get the math right” as well. This whitepaper presents the basics of case probability analysis and identifies a few of the pitfalls to avoid. These are the first steps to making better case management decisions.

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