Non-practicing entity (NPE) lawsuits are an increasing expense for companies. While these lawsuits are often not “bet the company,” they can be expensive. Given that the apparent goal of most NPE lawsuits is an early settlement, part of the job of minimizing costs is already done for the company.
But the cost-benefit analysis of early settlement is complicated. On the one hand, patent infringement suits are costly and settling early for less than the cost of litigation may be appealing. On the other hand, early settlement may signal weakness and lead to additional NPE lawsuits, subjecting the company to nearly endless litigation. In lieu of an early settlement, there are several ways defendants can minimize costs and hinder an NPE’s ability to move forward with litigation.
