Maximing The Value Of IP Assets: How Litigation Finance Can Provide What SMEs Need

The Canadian Intellectual Property Office (CIPO) has just released a report based on extensive roundtables it held with SMEs across Canada. Input from these Canadian entrepreneurs suggests that litigation finance is a necessary and helpful tool for Canadian businesses seeking to unlock the full value of their intellectual property.

1. IP only protects you if you can afford to enforce it. SMEs told CIPO that having patents isn’t enough: Resources are needed to enforce them. Participants noted that there is often a resource imbalance for patent disputes, making it hard for SMEs to succeed. Litigation finance offers a solution, as a litigation funder will provide the capital for the IP owner to bring or defend a claim, instead of watching a well-resourced competitor infringe with impunity.
2. Trade-off between growth and IP protection. Because of the cost of IP litigation, the report found that many SMEs choose product development over defending their rights. Litigation finance removes this trade-off: the company can invest in growth while the funder’s capital protects the IP. 
3. IP attracts investment in SMEs. Participants were consistent that IP portfolios signal credibility and future value to investors, but investors need comfort that this asset will be protected. A relationship with a litigation funder, who can support an enforcement strategy, gives that assurance. 
4. Access to the right experts is as scarce as the capital itself. SMEs described "shopping around" for professionals they trusted, while others found that advisors seemed to do unnecessary billable work. Litigation finance isn't only capital, as reputable funders bring a network of litigators and subject-matter experts who work on interest-aligned terms. This addresses the trust gap directly instead of leaving SMEs to find the right fit on their own.
5. Strategy without follow-through isn't worth much. Entrepreneurs said IP strategies funded through government programs often became "paper exercises”, that is, sound advice with no capital behind it to implement. Litigation finance provides that follow-through: it turns a strategy document that identifies an infringement or defensible right into a funded, actionable claim.

CIPO's roundtables show that Canadian SMEs already understand the value of their IP, but they often lack the capital and connections to defend it. Litigation finance provides the cash and the expertise to enable business to protect their valuable patents, giving SMEs exactly what they told CIPO they need.

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