How to Effectively Work with a Financial Expert in IP Litigation – From the Perspective of an Expert Witness

Financial experts are frequently retained in intellectual property disputes (patents, trademarks, trade secrets or other confidential information, and copyrights) to provide independent and objective financial analyses, including loss quantifications, accountings of profits, and determinations of reasonable royalties.  But more than that, financial experts can also help tell the financial story of a case beyond just the numbers by providing the Court with clear analyses based on the facts of the case.

To maximize the benefits of a financial expert, it is important to retain the correct expert at the right time.  Doing so can ensure fulsome production and comprehensive discovery on financial documents, support the selection of appropriate remedies (and avoid missing remedies like convoyed sales), identify other expert evidence needed, and, in some cases, help assess whether a claim is economically viable.

For these reasons, it is important to consider the following when selecting and working with a financial expert:

• Selecting the right expert: Independence and credibility are crucial when selecting an expert. You should also consider whether the expert is the right fit for your matter.  You should ask potential experts about their credentials, CV, past cases, and testifying experience.  In addition, well in advance of an active matter, you may also consider asking an expert to present to your law firm.  My partner and I are often asked to present on financial topics.  These sessions showcase an expert’s knowledge and expertise, presentation style, ability to distill complex financial topics, and their ability to respond on the fly to opposing views or hypotheticals.
• When to retain an expert: You should aim to engage (or at least reach out) to potential financial experts as early as possible. When retained early in the process, financial experts can advise on what documents may be needed, assist during the disclosure process, and ensure that nothing critical slips through the cracks.  Early analysis of financial evidence can also flag if other expert evidence may be required.  And in situations where it is unclear whether a financial expert will ultimately be needed, it can often still be useful to clear conflicts and discuss concepts generally.  This can help uncover financial topics or issues earlier in the litigation process.
• Don’t be afraid to challenge your expert: Throughout the engagement, it is important for counsel to ask questions of their experts, especially where something in their report or responses is not clear. Financial experts often internally test their own assumptions and methodology, but external scrutiny can help an expert to refine their opinions and determine the key areas to focus on.  Do not be afraid to debate your expert if something is not clear.  Rigorous back-and-forth with a financial expert can strengthen their final product and ensure it is well-articulated for the Court.

So, if you have a matter in, or headed to litigation, consider retaining (or reaching out to) a financial expert early, choose carefully, and don’t be afraid to challenge them.