The Lit-Year

Anyone working in technology is familiar with the light year.  It is not a measure time, but of distance — the distance that light travels in one year — about 5.9 trillion miles.  In the world of intellectual property we should define another unit of measure: the lit year.  A lit year, like a light year, is not a measure of time.  Rather, the lit year is the typical spend in IP litigation in a year.  The most recently published AIPLA Economic Survey reports the median cost of a medium ($2-$10 million) patent infringement case at $2 million. The 2017 PWC Litigation Study puts the medium time to trial in a patent case at 2.4 years.  This makes a conservative estimate of the lit year at a little over $833,000.

So what’s the use for the lit year?  Like its scientific cousin the light year, the lit year is a bench mark that provides perspective.  For example, a $350,000 IPR might initially sound budget busting, but if you consider that it is only 0.42 lit years — the amount you would spend in about 5 months of litigation — its starts to make sense.  Similarly, a $20,000 new product clearance may seem like a needless expense but when you consider that this is just 0.024 lit years —  the amount you spend in about six days of litigation, it sounds like a better idea.

The lit year is a helpful tool in measuring risk, or more precisely the cost of reducing risk.