Late breaking news in the Mavexar saga today.
Very Brief Background
Nimitz technologies was one of the Mavexar-related entites that appeared at a hearing last month before Judge Connolly, where they were ordered to:
"produce to the Court" (1) their communications with Mavexar and IP Edge regarding (a) Nimitz's formation, acquisition of patents, and potential liability for asserting those patents in these cases, (b) the 328 patent, and (c) the initiation and settlement of the cases Nimitz filed in this Court; (2) retention letters and/or agreements between Nimitz and [plaintiff's attorney's] firm; (3) monthly bank statements for any and all bank accounts held by Nimitz for the time period during which it filed the 11 complaints asserting infringement of the #328 patent in this Court; and (4) documents relating to Nimitz's use, lease, purchase, and/or retention of . . . the address alleged in Nimitz's complaints to be its principal office. The Memorandum also requires Mark Hall to submit an affidavit in which he identifies the assets owned by Nimitz as of the dates it filed the complaints in these four action
Nimitz Technologies LLC v. CNet Media, Inc., C.A. No. 21-1247-CFC, D.I. 32 at 74-75 (D. Del. Nov. 15, 2022)
Nimitz moved for a mandamus to prevent these disclosures arguing that the information was irrelevant, confidential and privileged. Judge Connolly, in turn, filed a blistering opinion explaining the reasons for his disclosure order. The Federal Circuit stayed the order but did not rule on the merits . . . until today.
Nimitz Will Have to Produce All of the Documents
The Federal Circuit denied the petition in a brief order, finding that Nimitz had failed to show it was entitled to the drastic remedy of mandamus.
Privilege Concerns Insufficient to Warrant Mandamus
Citing Judge Connolly's opinion responding to the mandamus petition, the Court found Nimitz's concerns about the potential disclosure of privileged information overblown:
Nimitz contends that the district court’s November 10, 2022, order would force it to turn over “highly confidential litigation-related information, including materials protected by the attorney client privilege and work-product immunity.” The district court, however, has made clear that its order “does not require Nimitz to docket these records or otherwise make them public” and is “free to submit and to publicly file at the time of its production of the records in question an assertion that the records are covered by the attorney-client privilege and/or work product doctrine and a request that for that reason (and perhaps other reasons) the Court maintain the records under seal. Under such circumstances, Nimitz has not shown that mandamus is its only recourse to protect privileged materials. Nor has Nimitz shown a clear right to preclude in camera inspection under these circumstances.
In Re Nimitz. Techs., 2023-103, Dkt. 44 at 4-5 (Fed. Cir. Dec. 8, 2022).
The Material Sought by the Order is Relevant
Similarly, the Federal Circuit held that the information related to Mavexar's role in the litigation was relevant to issues before the Court:
The district court identified four concerns as the basis for its information demand. All are related to potential legal issues in the case, subject to the “principle of party presentation,” . . . or to aspects of proper practice before the court, over which district courts have a range of authority preserved by the Federal Rules of Civil Procedure . . . . The district court did not seek information simply in order to serve an interest in public awareness, independent of the adjudicatory and court-functioning interests reflected in the stated concerns.
Id. at 6.
For reference, the "four concerns" Judge Connolly identified were:
- Did counsel comply with the Rules of Professional Conduct?
- Did counsel and Nimitz comply with the orders of this Court?
- Are there real parties in interest other than Nimitz, such as Mavexar and IP Edge, that
have been hidden from the Court and the defendants? - Have those real parties in interest perpetrated a fraud on the court?
No Opinion on the Court's Authority to Issue the Standing Orders
Unfortunately (for bloggers at least) the Federal Circuit declined to address the Court's authority to issue the standing orders on litigation funding and corporate disclosure statements:
Nimitz makes clear that it is “not ask[ing] th[is] Court to reverse either Standing Order.” Reply at 14. And it is clear that a direct challenge to those standing orders at this juncture would be premature, as Nimitz has not yet been found to violate those orders and will have alternative adequate means to raise such challenges if, and when, such violations are found to occur.
Id. at 5.
Unfortunately (again, for me), it now seems likely that the materials will be produced in camera, in the first instance so it may well be a while before we get an update on these issues. But I cannot wait for the final opinion.
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