Litigation funder Burford Capital says it stands to gain up to $1.4B after a US jury ruled against Apple in a patent case, awarding $5.7B in damages to Taction

Litigation funders stand to collect billions from a jury verdict against Apple, potentially increasing investor appetite for patent cases.

A San Diego jury has awarded Taction Technology $5.7 billion in damages after finding that Apple infringed on two of its patents related to tactile transducers, the technology that creates vibrations in electronic devices. The verdict, which is reportedly the largest patent award in U.S. history, was largely financed by litigation funders, including entities linked to Burford Capital, which stands to gain up to $1.4 billion. Taction's technology is used in headphones and gaming headsets, and the company alleged that Apple's Taptic Engine in iPhones and Apple Watches used its inventions without licensing. Apple denies the allegations, stating its technology is fundamentally different, and has announced its intention to appeal the verdict. The case was initially dismissed but revived by the Federal Circuit, and the jury found the infringement was not willful, which typically limits the potential for enhanced damages.

This landmark verdict, particularly the substantial damages awarded to a plaintiff financed by third-party litigation funders (TPLF), re-ignites debate about the role and regulation of such funding in the legal landscape. Despite ongoing legislative efforts and state-level bans aimed at curbing TPLF, this outcome demonstrates that significant awards are still possible, potentially emboldening funders to pursue more high-stakes patent litigation. The case also highlights the specific vulnerabilities of large tech companies to patent claims, especially those involving widely adopted technologies like smartphone haptics.

The significant sum involved, coupled with the potential payout for funders, may spur further investment in patent assertion and analysis, potentially leading to an increase in the number of patent lawsuits filed against technology giants. For companies like Apple, this verdict underscores the critical need for robust patent defense strategies and diligent review of their technology's origins to avoid infringement claims, especially as legal and regulatory scrutiny of litigation funding intensifies.