What Erso looks for in patent disputes
Patent disputes can be highly attractive for litigation funding, but not simply because the patent is valuable or the defendant is large. At Erso Capital, we look at them through the lens of recoverable value. The question is whether the claim can be turned into a commercial outcome within a timeframe and risk profile that makes sense for capital. That means the merits, economics and enforcement path all have to line up.
The strongest opportunities usually begin with a patent or portfolio that has been properly tested before it reaches us. We want to understand the validity position, the infringement read, the claim construction issues, and the likely routes by which the defendant will attack the case. A good patent case is rarely risk-free, but the risks should be identifiable, bounded and capable of being addressed by a strong legal team.
Validity matters enormously. We are not looking for cases where the funding thesis depends on the defendant choosing not to fight. We want patents that can withstand serious challenge, whether through the PTAB, the district court, the EPO, the UPC, or national courts. A patent that looks strong only until the first serious validity analysis is not a fundable asset. One that has been pressure-tested and still supports a clean infringement case is much more interesting.
Commercial scale is equally important. A strong patent with a small damages case is not usually a fit. We look for disputes where the accused products or services are commercially meaningful, where damages can be modelled with discipline, and where the likely recovery justifies the budget required to get there. Not every case needs to be a headline damages claim, but the economics have to work once legal spend, enforcement risk, duration and capital cost are taken into account.
Damages discipline is one of the areas we focus on most closely. It is not enough to say that the defendant is large or that the technology is important. We want to see how the damages case will actually be built. Are there reliable comparables? Is the royalty theory defensible? Has apportionment been addressed properly? Can the expert evidence survive scrutiny at trial and on appeal? A large damages number is only valuable if it can be supported.
The legal team matters too. Patent litigation is too technical, too procedural and too expensive for weak execution. We look for counsel who know the forum, understand the technology, and can explain the case without overcomplicating it. The best funding conversations are with teams who are candid about risk. We do not expect perfection. We do expect realism.
Forum and timing are central. A case in a court with a credible path to trial may be more attractive than a theoretically stronger claim likely to spend years in procedural delay. The same applies internationally. The UPC, US district courts, PTAB proceedings, EPO oppositions and national enforcement routes all affect timing, leverage and cost, and a funding decision depends on how those pieces fit together.
We are also interested in structure. In some cases, funding is needed to pay legal fees and expenses through trial. In others, the claimant may be seeking to share risk, finance enforcement across several jurisdictions, monetise a judgment, or combine funding with insurance-backed risk management. The right structure depends on the claimant, the legal team, the budget, the risk profile and the expected route to recovery.
Our funding capability reflects that range. For a single infringement campaign, Erso can typically consider commitments in the region of $3 million to $20 million, depending on the merits, budget and recovery profile. For high-quality portfolios, our capacity can extend to $60 million or more, but scale depends on genuine diversification: multiple patent families, a broader enforcement strategy, and limited systemic risk across the portfolio. The strongest portfolio opportunities are those where value does not depend on a single patent, a single legal theory, or one binary outcome.
What we do not look for are speculative assertions, weak portfolios dressed up as leverage, or cases where the damages theory is doing more work than the merits. We are cautious where the strategy depends almost entirely on settlement pressure rather than a credible ability to win and enforce. Defendants, courts and insurers are increasingly sophisticated, and a case built on optimism tends to reveal itself quickly.
The cases we like have strong patents, clear infringement, a defendant with meaningful exposure, credible damages, a capable legal team and a realistic budget. They also have a strategy thought through from the beginning: how the case will be brought, how the defendant is likely to respond, where the pressure points are, what could go wrong, and how value will ultimately be recovered.
That is where funding adds real value: not by making a weak case viable, but by allowing a strong one to be pursued properly.
For patent owners and law firms, the best time to speak to a funder is before the strategy has hardened and the budget has been fully committed. Early engagement lets us help assess the risk, shape the structure and determine whether capital can be deployed in a way that supports the case rather than distorts it.
If the case is strong, the damages are credible, and the path to recovery is realistic, we are interested in the conversation.
KEY CONTACTS
KEY CONTACT (USA)
JAMES BLICK
KEY CONTACT (UK)
BOB KNOCK