IAM Interview with Adam Gill: Litigation Funders Like Trade Secrets Cases

“Most commercial litigation finance providers will consider trade secrets cases and are bullish on them. There are just not as many of them as we would like.”

-Adam Gill, founder and managing director of GLS Capital

Each trade secrets case must allege the theft of information held as secret by a company, which can be difficult to detect and to prove, he explains. Plus, in contrast to patent cases, only operating companies generally bring trade secrets lawsuits. Several aspects of trade secret cases may make them more attractive to funders, Gill says. It is not possible to invalidate a trade secret with prior art, as in a patent case. There is also not an extra layer of risk of invalidation in US Patent and Trademark Office proceedings as there are in patent cases with inter partes reviews. Additionally, jury verdicts in trade secret cases are affirmed at a higher rate than patent cases at the US Court of Appeals for the Federal Circuit. Plus, unlike the technical comparisons of patents to the accused products or to prior art – which can be dry when presented to a jury – trade secrets cases often come with a rather intriguing story of a bad actor who engaged in wrongdoing. It can be quite engaging and compelling for the jury.

“For all those reasons, to my knowledge all commercial funders like trade secrets cases,” Gill says.

Gill adds that unlike non-practicing entities or individual inventors who often need funds to pursue patent litigation, operating companies with trade secret claims are more likely to have a budget to fund their own case. However, trade secret cases can be as expensive as patent cases, some operating companies prefer not to place a large litigation expense on their balance sheets and may see value in sharing the risk and expense of litigation. That’s why some operating companies use litigation funding.

Original IAM Article

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