Recently, I asked a few funders whether, given rising patent verdicts, the new PTAB winter, lower interest rates, and growing patent volume, they saw any macro trend – really anything at all – suggesting they should pull back from investing in patent litigation or counselling prudence.
They thought about it, searched themselves, and answered, simply: “nope.”
There are, of course, real headwinds and perceived risks in litigation funding generally, particularly in the mass tort and class action space. Competition among funders for the same investors and deals has intensified as new funds enter and overall market interest in alternatives has increased. Limited partners have grown more skeptical of private equity and alternative-investment performance metrics, and seasoned, specialist funders on their second, third, or fourth vehicle now find themselves competing with broad, multi-strategy funds like Davidson Kempner for both assets and LP dollars. Add to this the looming risk of state, federal, or court-driven disclosure and regulation, which has created understandable unease among more camera‑shy investors, and you get a pervasive sense that pension funds and family offices may be growing more selective and funding growth may be stagnating.
Patent litigation finance, however, looks very different from the rest of the lit‑funding landscape. That market is far from saturated, the risk of compelled disclosure is comparatively remote, and – with inter partes reviews (IPR) increasingly out of reach as a defensive tool – many more cases are headed to trial in already fast‑moving jurisdictions. Filings are up, case durations are lengthening, settlements are harder to achieve, and total damages awards hit a new record in 2025, cresting above the five‑billion‑dollar mark even before the latest regulatory shifts had time to add even more fuel to the fire.
If demand letters, licensing campaigns, and case filings remain reliable bellwethers, we are already in genuine boom times in patent monetization. New fund formation backs this up: significant fresh capital has been raised specifically for IP‑focused strategies, and much of it is already committed to patent‑centric ventures.
In short, all gas, no brakes.
It is worth underscoring that each of these trends was already underway in 2025, before the current administration moved to slam the door on the lion’s share of future PTAB proceedings. In October 2025, the Trump Administration’s USPTO released a Notice of Proposed Rulemaking imposing several stringent new limitations on inter partes review, sharply curbing the ability of companies to turn to the PTAB, both while district court litigation is pending and in perpetuity for patents that have previously been challenged.
Pause to reflect for a moment on retroactivity: tens of thousands of already‑issued patents will be inoculated from further PTAB challenge because of past proceedings against them. If the proposal sails through to final rule, the practical result is that once a defendant is sued – particularly in venues like Texas – these challenges will be off the table. Once anyone has taken a shot at invalidity, anywhere, the door will be closed for good.
The USPTO has framed this shift as a move “Back to the Future”: a deliberate return to a pre‑AIA environment in which single‑patent suits routinely commanded six‑figure settlements; one where the threat of aggressive assertion campaigns and unpredictable jury trials pushed defendants to resolve even weak cases simply to avoid the cost and risk of full‑blown litigation. Rolling back PTAB access has both the clear intent and ultimate effect of increasing trial and judgment risk across the spectrum, including for patents that are objectively mistakenly granted and likely invalid.
Despite broad criticism from much of the U.S. business community and the public, the administration appears poised to implement these rules substantially unchanged. That outcome would likely usher in an era of more jury trials, more aggressive licensing demands, and substantially greater licensing outflows. The market for patent assertions is already reacting, and funders – publicly and privately – are enthusiastic.
It is hard to envision a scenario where this doesn’t drive litigation costs (or settlement value) higher for nearly every IP‑bearing asset. Parties will be forced to litigate issues that, in the PTAB era, could sometimes be sidestepped or front‑loaded into an administrative proceeding. Automatic or discretionary stays tied to IPRs will fall off sharply, and filing counts, case durations, and trials should rise, constrained only by judicial capacity.
Back to the future, indeed – but with one crucial twist. The earlier era the administration seeks to bring back was essentially devoid of modern litigation funding. Today’s environment is radically different: billions of dollars are earmarked for patent litigation alone, and millions of in‑force U.S. patents are available as potential assets. The combination of higher damages, more licensing activity, and structurally unavoidable trials is likely to produce volumes of enforcement and payout that far exceed those seen a decade or two ago. Layer on the accelerant of private capital, and the result is a market that may burn especially hot for U.S. manufacturers and content providers, who are positioned to feel the impact more acutely than they have in years.
For investors in patent litigation claims, now is the time. For corporate defendants, it’s best to batten the hatches.
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