Choosing a litigation finance partner: why capital and chemistry both matter
In patent litigation, securing funding can be the difference between a strong case being pursued properly and a valuable claim never getting off the ground. But capital is only part of the decision.
A patent dispute can take years to resolve. It may involve district court proceedings, PTAB challenges, EPO or UPC issues, parallel national actions, appeals, settlement discussions and budget decisions that evolve as the case develops. In that environment, the question is not simply whether the funder can provide the capital. It is what the funder will be like to work with once the agreement is signed — and that matters more than it is often given credit for.
Before Erso Capital was formed in 2021, many of our team spent years arranging litigation funding and insurance as brokers and advisers. We saw the market from the client’s side of the table. We saw different funder personalities, different approaches to diligence, different ways of negotiating funding agreements, and different behaviours once capital had been committed. Some funders were passive. Some were constructive and commercial. Others were more difficult, inflexible or interventionist. In a complex patent campaign, that difference is not cosmetic: it affects the relationship with counsel, the confidence of the claimant, the quality of budget discussions and the way difficult moments are handled.
Patent litigation is rarely a straight line. There may be adverse rulings, amended budgets, changed timelines, new defendants, settlement approaches, validity challenges, or strategic decisions that require calm and practical discussion. A funder that treats every development as a crisis becomes a distraction. A funder that second-guesses every litigation decision makes life harder for the legal team. A funder that is inflexible when the case needs sensible adjustment creates exactly the wrong dynamic.
That is not how we want to operate.
At Erso, our objective is to be clear at the outset about the case theory, the budget, the risks and the plan. We want the difficult conversations to happen before the funding agreement is signed, not after the first unexpected development. That means pressure-testing the merits, building in appropriate contingencies, understanding where the defendant is likely to attack, and being honest about the issues that could affect timing or recovery.
Once a case is funded, our role is not to run the litigation. Strategy and settlement decisions sit with the claimant, advised by their legal team. Our role is to provide capital in accordance with the agreed plan, remain available where our experience may be useful, and be constructive when the case requires discussion. We want to support the litigation, not crowd it. Good funding should not distort the case; it should let a strong one be pursued properly.
This is especially true in patent disputes, where the relationship between funder, claimant and counsel is tested over a long period. The legal team needs to know the funder understands the forum, the procedural risks, the technical issues and the commercial realities of enforcement. The claimant needs to know the funder will behave sensibly if the case takes longer than expected or the route to value changes. Everyone needs to know the same commercial objective is being pursued.
That does not mean a funder should be passive to the point of being absent. Experience matters. A good funder should understand litigation risk, ask the right questions, and help identify issues early. But there is a difference between constructive engagement and interference, and between disciplined underwriting and unnecessary friction. Clients and law firms feel that difference quickly.
Independent market feedback reflects the kind of funder we set out to be. Legal 500 has described Erso as “savvy and quick-moving”, with patent litigation mandates identified as a particular strength. Erso has also been praised for providing “clear and objective input on funding and structures” and for being “flexible and a robust partner to work with”. Chambers & Partners has also recognised Erso in its litigation funding rankings, with market feedback reflecting the strength of the team and the constructive way it works with clients and advisers.
In the patent market, funding is sometimes treated as a necessary evil. We understand why. Some claimants and law firms have had experiences where the capital came with too much friction, too much pressure, or too little flexibility. Our view is different. Funding should be a commercial tool that improves the claimant’s position, not a burden that makes the litigation harder to manage.
The best funding relationships are built on alignment. The claimant, counsel and funder should understand the case, the budget, the risks and the realistic routes to recovery — and should be able to speak candidly when the case develops. That is where trust becomes valuable. Not in the easy moments, but when something changes.
For patent owners and law firms, choosing a funder should therefore involve more than comparing headline terms. Price matters. So does capacity. But so do responsiveness, flexibility, judgement and the ability to work constructively over the life of the case.
At Erso Capital, we want to be judged on both: the capital we provide, and the way we behave once we provide it.
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