On October 11th, Dennis Crouch, a law professor at the University of Missouri School ofLaw, published a detailed breakdown of third-party litigation funding (TPLF) in patent cases, emphasizing the ethical and transparency issues surrounding this growing practice.
"While TPLF has undoubtedly increased access for many patent holders, it has also given rise to significant ethical concerns and abuses," said Crouch. "One of the most pressing issues is the potential for effectively sidelining the nominal plaintiff – the actual patent holder – in favor of the financial interests of funders and attorneys."
Over the past decade, TPLF has become a significant factor in patent litigation, providing much-needed financial support to patent holders with limited resources. However, Crouch argues that this financial backing can come at a steep cost to the integrity of the legal process.
He warns that the financial motivations of third-party funders and attorneys can overshadow the interests of the actual patent holder, leading to situations where plaintiffs lose control of their own cases.
Additionally, Crouch raised concerns about the role of foreign entities in funding U.S. patent litigation through TPLF, suggesting that it could pose risks to the stability of the legal system. “There is some notion that TPLF is often channeled into the US via foreign sources -- something that has raised concerns that this could somehow destabilize the rule of law,” he stated.
Dennis Crouch has been involved in patent law issues for 20+ years.
A Research and Markets report for 2025-2037 indicates the global market for litigation funding investment is set to rise at a CAGR of 11.1%, capturing a revenue of about USD 60 billion by the end of 2037.
According to a 2021 study from the Perryman Group, legal system abuse results in the loss of 4.24 million jobs, $429.35 billion in output, and more than $110 billion in government revenues annually in the U.S.