FAQ: How is GPC Better than a Law Firm?

GPC has several major advantages over law firms:

1. You are our top priority. GPC was formed for the sole purpose of enforcing the patent rights of small and medium sized companies and individuals on a contingency basis. GPC chooses to represent only a few, select clients. This makes you, as the contingency client, our top -- indeed, our only -- priority.

Law firms, on the other hand, generate an absolute majority, if not all, of their revenue from hourly billings. Indeed, lawyers are evaluated mainly on the amount of their billings. As a result, contingency-based cases are typically given a low priority within the law firm, with inexperienced junior associates responsible for the day-to-day handling of a case. Law firms often use contingency cases (just as their pro bono cases) to train their new associates. With GPC, this is not so because our experienced business and legal personnel only represent clients on a contingency basis. Our senior attorneys, who are very experienced in patent litigation and licensing, will handle your case personally.

2. GPC approaches patent licensing and enforcement from a business, rather than a strictly legal, perspective. As your patent licensing and enforcement agent, GPC is the primary contact with prospective licensees and infringers. GPC engages the business personnel of a prospective licensee or infringer in an effort to resolve matters amicably and to avoid litigation if at all possible. Our CEO, Alex Poltorak, is a businessman and not a lawyer. Our in-house attorneys have MBAs and substantial business experience, which is in addition to being registered patent attorneys with substantial licensing and litigation backgrounds. GPC balances the risks and rewards associated with exploiting a patent portfolio from the perspective of a business person in an effort to maximize current, future, and overall licensing income, as well as to minimize the risk and the time required to achieve this. In other words, we view patent enforcement first and foremost as a business and seek to maximize its economic value.

Lawyers, on the other hand, are trained and paid to litigate and often lack a business background. Consequently, they do not approach a matter from a businessperson’s perspective. In addition, a law firm is barred under ethical rules from corresponding directly with a prospective licensee or infringer that is represented by counsel. This removes the business people from the negotiation process, which can hinder if not totally eliminate the possibility for resolving a matter early on. GPC’s approach is from that of a businessperson, which increases the likelihood of successfully resolving a matter. While lawyers frequently dig their heels and get bogged down in the technical and legal details of the case, we strive to meet with the senior executives of an infringer (not being a lawyer, our CEO can do that) and talk “money” – the only language they understand (and, from our perspective, the only thing that ultimately matters).

3. GPC pays all expenses. Patent litigation often requires engaging expensive expert witnesses, extensive travel, creating demonstrative exhibits, and the like. These types of expenses can be substantial and can amount to hundreds of thousands of dollars. GPC pays for all of these disbursements and expenses. GPC relieves a patent owner of all financial burdens associated with the case.

Law firms are prohibited under the rules of ethics of the bar from paying out-of-pocket litigation expenses on behalf of a client. A law firm working on a contingency basis, therefore, requires that the client pay for these types of expenses. This happens in one of two ways. First, the client pays for the expenses as they are incurred, which requires a substantial and often-prohibitive cash outlay on the part of the client. Second, the law firm may advance the expenses. In this case, the law firm’s percentage of recovery is increased. In either case, the client pays for the expenses so his net recovery is less than the negotiated share based on a contingency percentage. With GPC, the contingency percentage agreed upon represents the net recovery to the client. In an unfortunate event that the law firm loses a case, they must hold the client liable for the out-of-pocket expenses they had advanced on his behalf. Thus, the client remains responsible. Not so with GPC. We pay expenses so that you will not have any financial obligations.

4. GPC has a proven track record, licensing and enforcing patent portfolios on an industry-wide basis and generating millions of dollars of licensing income from major corporations. GPC is uniquely experienced to pursue multiple infringers simultaneously. We have a proven system in place for identifying prospective licensees and infringers and efficiently resolving matters amicably or pursuing litigation. For example, GPC has successfully enforced and licensed a portfolio of four patents against a segment of the computer communications industry, which has (so far) resulted in more than forty-five licenses and over ten million dollars in royalty income.

Law firms do not desire or are not equipped to pursue multiple infringers simultaneously. The pursuit of multiple prospective licensees and infringers is an involved, expensive, and time-consuming process. Law firms hesitate to dedicate too many personnel to a contingency case as it takes away from their billable activities. In addition, law firms tend to commence a single litigation because the perceived risk of instituting numerous actions for patent infringement is too great. Furthermore, a law firm often has to weigh suing a particular defendant versus a possibility of obtaining this company as a future (paying) client. In the eyes of a law firm, a paying client is always better than a contingency one. Each of these prevents law firms from pursuing multiple parties at the same time, thus reducing the chance of generating income. GPC is free from these concerns and will pursue multiple infringers simultaneously and, if necessary, will commence litigation against several of them at the same time.

5. GPC will not have conflicts of interest. GPC does not represent any of the potential licensees of your patents. Therefore, we would be able to embark on an industry-wide enforcement campaign and implement an optimal strategy against all infringers.

A law firm represents hundreds of clients and may have numerous conflicts of interest, which would preclude it from enforcing the patents against all infringers. In this case, you would be required to find another law firm to handle those cases in which your first law firm has a conflict. There would be a significant amount of time and effort for the new firm to learn about all of the previous litigations and licensing efforts, not to mention the patent documents and related technology. Having multiple law firms working on your case also presents a serious danger that inconsistent positions may be taken where a position taken in one case may hurt the other. Law firms working on contingency have a very provincial view and are only concerned with their case, not with your overall enforcement campaign. With GPC, this would not happen. We have no conflicts and will manage and coordinate the entire patent enforcement and licensing campaign.

There is another very important question of litigation strategy that is dealt with differently when you have multiple defendants. As you probably know, in the course of patent litigation very often the defense finds some obscure prior art references, which may invalidate the patent in suit. When a law firm represents you in a single case, they may feel they need to roll the dice and expose the patent to the risk of being invalidated (almost 40% of patents are invalidated in trial) by taking the case to trial. We, on the other hand, having in mind the entire campaign involving many defendants, may suggest that it is far better to settle the cases with individual defendants (instead of going to trial) for less, in order to be able to collect large sums of money overall without endangering the patent. Only GPC, which has an overall responsibility for enforcement of a patent portfolio, can afford such a strategy, which is typically unavailable to a law firm.

6. We can insulate the patent owner from countersuit or court sanctions. A law firm represents a patent owner as a client who ultimately has to be named as the plaintiff in a lawsuit. This exposes the patent owner to a very real and substantial risk. In a recent case, a judge fined the patent owner $250,000, which forced him into bankruptcy. The patent owner lost his house and all of his other valuable patents. This tragedy could have been avoided. We have developed a mechanism whereby we insulate the patent owner from the countersuit and potential liabilities associated with it.

If requested by the patent owner, GPC can create a special purpose company to serve as a vehicle for the patent enforcement campaign.

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