Patent litigation finance has become one of the largest and most closely watched verticals in the industry. One widely cited estimate suggests roughly 61% of patent infringement lawsuits filed since 2020 are believed to have involved some form of litigation funding backing, with funders collectively fronting an estimated $2.3-5 billion annually into patent matters, though precise figures are hard to verify since most courts do not require disclosure of funding arrangements.
Burford Capital made what is generally regarded as the first litigation finance loan for a patent infringement case in 2013 and remains among the largest funders in the space; Longford Capital and GLS Capital are also frequently cited as funders with particular depth in complex IP matters.
Patent cases are underwritten differently from ordinary commercial disputes: damages models (reasonable royalty versus lost profits) are heavily contested and expert-driven, timelines often run three to five years through appeal to the Federal Circuit, and outcomes are frequently binary. Funders compensate for this by pricing in wide return ranges, some patent-focused funders target 200% to over 400% return on invested capital, and by favoring claimants with strong prior art positions, reputable damages experts, and, increasingly, diversified patent portfolios rather than single-patent bets.