Third-party Funding In Intellectual Property Dispute Resolution

Third-party Funding is a litigation financing mechanism,which aims to help parties to pay the cost of the litigation or arbitration in advance,and acquire certain percentage of compensation if the parties win the case or claim.TPF is originated from the UK and Australia,with the capability to help parties of the dispute to pay the remedy cost which it cannot afford and to transfer the risk of the case.In recent years,the number of IP disputes has continuously increased.The dispute itself reveals complicity and specificity which lead to a higher cost for settle the disputes.Litigation and arbitration are two main mechanisms for IP disputes resolution.For those newly-established company with the difficulty in IP value evaluation and thus in financing,the need to pay remedy costs from litigation or arbitration for an uncertain result by limited cash flow is of little urgency.However,with the help of the TPF,the IP right holder with limited resource could enhance their capability of remedy and efficiently transfer the risks to the funder.Thus,the mutual benefits between right holder and the TPF funder can be achieved.This paper also considers the local judicial practice and market status and proposes the possible regulation on TPF-IP in both substantive and procedural perspective.In addition,this paper raised the innovative design for TPF-IP non-profit fund under governmental guidance and market oriented operation.Thus it strengths the guidance of the TPF market and avoid risks brought by TPF when entering IP protection field.