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Why this data for patent litigation and expert witness fees can’t be true

An article in the, May 14, 2006 (Barry Schlacter) quoted Brian Reuter of Guideline, Inc., a firm that supplies technology expert witnesses. All praise mystical metrics!

“In patent litigation, the average cost per side is $2 million. There [were] 2,814 patent litigation filings in 2003, which means about $11 billion. If just 1 percent was spent on expert witnesses, that’s more than $1 billion [sic] for patent cases alone.”

A) The average cost per case may have holes (See my posts of May 1, 2005 and links – especially since so many cases resolve before trial; May 4, 2005 estimating total patent litigation costs – in 1991 dollars – of about $1 billion, but March 25, 2005 giving a figure close to $2 million; Nov. 11, 2005 on Microsoft averaging about $3 million per patent lawsuit; and Nov. 30, 2005 on boutiques handling patent cases and a $2 million figure.).

B) One study in six major industries found about 1,100 federal patent cases in the decade 1992 to 2002 (See my post of April 9, 2006 with LexisNexis research.). Perhaps state courts have jurisdiction over federal patent cases?

C) The multiplication of a high case cost by a high number of cases leads to exaggerated total costs (See my post of Feb. 1, 2006 (#2) that estimates $4 billion total spent on US patent litigation in 2000.)

D) Who knows whether one percent is plausible as the amount paid expert witnesses?

E) One percent of $11 billion, even on the breathtaking assumption that $11 billion is plausible, is $100 million, not $1 billion.

For more on patent litigation, see my posts of Aug. 24, 2005 on patentees winning more lawsuits and Nov. 3, 2005 (#3) about jury trials in patent litigation.

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One response to “Why this data for patent litigation and expert witness fees can’t be true”

  1. Brian Reuter says:

    Hi, this is a Brian Reuter, the guy that was quoted in the Star-Telegram article you mentioned. I just wanted to let you know where I got the figures.
    First of all, the reporter got the math wrong. It should have been $100 million as you pointed out. I don’t know what the exact market is for expert witness work. I was trying to give the reporter a sense of the size.
    The figure I got of median litigation fees of $2 million per side in patent litigation came from the American Intellectual Property Law Association Report of the Economic Survey 2003.
    The number of patent law suits I offered came from Administrative Office of the U.S. Courts for the year ending September 30, 2003. Here is a link to the same data cited by USA Today,
    I have no idea if expert witnesses get 1% of the money spent on patent litigation. I simply said to the reporter, “what if…?” in order to give him a sense of what the market is.
    I haven’t seen firm numbers on the expert witness market, but the basic math based on the stats I offered from quality sources certainly gives one a sense of the size, i.e., large.
    Brian Reuter