Hedge fund managers are always looking for an edge. Lately they’ve found one by sending patent litigators to court — not to try a case, but as highly informed (and highly paid) observers. Their task: to pick up and quickly report back to the money managers any intelligence that could move a stock.

Litigators have often been called in to evaluate the investment impact of a patent conflict during the course of due diligence for an acquisition. Now hedge funds are moving earlier and faster. They are putting lawyers in the courtroom to report on the outcome of a trial as it is happening. “I hear these stories of Markman hearings; the minute the ruling comes down, 15 guys jump up and run out of the room,” says Ron Laurie, of Inflexion Point Strategy, an IP investment bank. “These guys are texting the hedge fund, so they can short the stock.” By the time the market-moving information hits financial news services like Bloomberg, the investors get to take their gains.