Markman hearing

A pretrial hearing, named after Markman v. Westview Instruments (1996), at which the district court construes disputed claim terms and fixes the scope of the patent's protection for purposes of trial. Markman rulings are interlocutory and generally not immediately appealable, but they effectively determine the litigation's trajectory — a ruling that narrows claim scope often triggers settlement discussions or case abandonment. In the litigation finance context, funders monitor the scheduling of Markman hearings closely because the ruling represents a major valuation inflection point and can trigger milestone-based disbursement provisions in funding agreements. Some funders stage capital deployment around Markman outcomes, committing initial tranches for pre-Markman work and reserving additional capital contingent on a favorable ruling.

Funders treat the Markman ruling as the primary de-risking event in a patent investment and structure capital commitments accordingly — releasing a minority of committed capital pre-Markman to fund claim construction briefing and expert support, then reserving the balance contingent on a favorable or neutral construction. A materially adverse Markman ruling is one of the few events that triggers renegotiation or early-exit provisions in patent funding agreements, since it can convert a well-underwritten case into one with a collapsed infringement theory overnight.