Costs of Trademark Litigation

The cost of trademark litigation is variable and difficult to estimate with precision.

For example, the size and location of the law firm handling the matter affect costs. According to the American Intellectual Property Law Association’s (“AIPLA’s”) 2007 Economic Survey, small firms carry out trademark litigation at significantly lower average costs. In addition, trademark litigation carried out by firms in the Intermountain West costs is vastly less expensive than when carried out by firms elsewhere in the country. Because Technology Law Group is a boutique firm in Idaho specializing in intellectual property, Internet, and international law, we offer both of these costs advantages.

Costs also vary with the litigation’s duration, and shorter litigation means lower costs. The overwhelming majority of trademark cases never go all the way to trial. Most settle or are resolved through summary judgment proceedings. For instance, the online PACER database reveals that 3754 trademark cases were filed in federal court in 2006. A PriceWaterhouseCooper’s survey reported that only 1.5% of such cases went to trial the previous year.

The status and quality of the mark being asserted or defended also affect costs. For example, a long-standing, but merely descriptive mark may be protectable, depending upon its acquired distinctiveness can be proven through evidence of “secondary meaning.” A survey to establish secondary meaning may cost some $20,000.

Costs also depend upon level of legal sophistication of and litigation tactics of the parties and their attorneys. An AIPLA presentation by a large company’s in-house counsel in 2005 put the legal costs to brief and argue an issue before the court at $20,000. Although large companies tend to hire large and very expensive legal firms, the costs associated with briefing and arguing a complex legal issue can still be sizable in smaller and more moderately-priced firms because of the amount of legal research and other work involved.

Although trademark litigation costs are difficult to estimate, the AIPLA 2007 Economic Survey found that where less than $1 million is at risk in the trademark litigation, mean costs are $184,000 through the discovery phase and $327,000 if the litigation is concluded through trial.

As noted above, small firms are more cost-efficient in carrying out trademark litigation. The Survey found that the median costs through the discovery phase ran from $131,000-$200,000 for small firms, as compared with $210,000-$250,000 and $340,000-$500,000 for medium-sized and large firms, respectively. The total costs of these litigations carried through trial ran $239,000-$338,000 for small firms, as compared with $340,000-$500,000 and $443,000-$600,000 for medium-sized and large firms, respectively.

For more information, please contact us at +1.208.939.4472 or info@technologylawgroup.com.