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David V. Goliath

Inventors invent. Big companies steal. And you can't fight it because you don't have the money to win--or can you?

Big companies stealing inventors' ideas isn't news. But lone inventors winning large judgments against those companies is.

Historically, individual inventors don't sue major corporations for one reason: They don't have deep enough pockets to pay for protracted and expensive legal battles.

Litigation, of course, is expensive. But suing a big company for patent infringement or misappropriation of trade secrets is a veritable wallet-buster. Cases drag on for years. Hundreds, if not thousands, of hours are spent in discovery, resulting in mountains of paper. According to the AIPLA, litigation costs in a patent infringement suit, from discovery through appeal, can range from $793,000 to about $2.5 million.

That's exactly what Ron Chasteen was facing when it came time to sue for his patent. But the inventor was willing to take the risk. It took Chasteen and his partner, John Balch, several years, a lot of money and five different law firms before they found one that agreed to take the case on a contingent-fee basis. "They were all happy to just take our money with no end in sight," Chasteen says. "We got nowhere--just a lot of bills."

Chasteen is one of a growing number of lucky inventors who, thanks to increased contingent-fee litigation, where a law firm gets paid only if its client wins, now have the opportunity to go after corporate giants and win sizable judgments.

"Contingent-fee litigation is for individual inventors and small- to medium-size businesses who would have trouble affording normal patent or trade-secret litigation," explains Joe Hosteny, a partner in the Chicago law firm of Niro, Scavone, Haller & Niro, which has tried and won several patent and trade-secret cases, including Chasteen's. "Without con-tingent-fee litigation, big corporations could steal solo inventors' ideas with no one to stop them."

Chasteen was awarded his patent for a fuel-injection system for snowmobiles in the late 1980s. He and his partner approached Polaris Industries of Roseau, Minnesota, about a deal. "When we first met with their head engineer, he told us we had made a massive leap in technology," says Chasteen, 47. Initially, Polaris wanted to buy Chasteen's system outright. But the inventor didn't want to sell. Eventually a deal was struck, and Polaris agreed to buy the systems from Chasteen. After about a year of development, Polaris pulled the plug, claiming it was going to hold off on selling fuel-injected snowmobiles.

Chasteen was dumbfounded when, a short time later, Polaris introduced a fuel-injected snowmobile. He immediately bought one and tore it apart...and found it used the very tech-nology he had developed. "We were furious," Chasteen says. "They'd simply cloned ours." Chasteen decided to sue Polaris as well as Fuji Heavy Industries, which was supplying Polaris with the fuel-injection system.

After almost 11 years, Chasteen finally got the justice--$70 million worth of it--he deserved. And his isn't an isolated case. "We're seeing more law firms taking on patent-infringement contingent-fee cases," explains Meg Boulware, an intellectual property attorney and a former president of the Alexandria, Virginia-based American Intellectual Property Law Association (AIPLA). "It's a function of strong patent law, increased awareness of intellectual property and more firms with enough resources to take [these cases] on."

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This article was originally published in the November 1999 print edition of Entrepreneur with the headline: David V. Goliath.

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