When people say that D. Del. is "against litigation funding," they imply that the Court has some kind of general bias against parties who use litigation funding. That's wrong. I've never seen a Delaware judge dislike or rule against a party because the party used litigation funding. And the Court as a whole is certainly not biased against plaintiffs (or defendants), funding or no funding.
With all of that said, I thought it was worth noting that Judge Burke recently ordered production of litigation funding material to the extent it related to the value of the patents.
After reviewing litigation-funding-related documents in camera, he ordered production of those that relate to the value of the patents at issue:
The Court has previously ordered that litigation funding-related documents are relevant to the case and should be produced to the extent that they relate to the value of the patents at issue in this litigation. (D.I. 342 at 155-57)
After reviewing the documents in this category, the Court concludes that Document Nos. 4, 11, 14, 15, 1 16, and 17 do not contain content that relates clearly or directly enough to the value of the patents at issue in this litigation. Thus, these documents are not relevant and need not be produced. Document No. 5 (containing representations relating to expected potential licensing revenue) and Document No. 9 (containing representations relating to potential reasonable royalty damages) do appear as if they contain information that could inform or relate to the value of the patents at issue in this litigation (perhaps in addition to other related patents in Plaintiff’s portfolio), and so they should be produced.
Robocast, Inc. v. Netflix, Inc., C.A. No. 22-305-JLH (D. Del. Jan. 8, 2025).
The previous order that the Court referred to is from a July teleconference (the transcript of which only became available last month), ordering the discovery of litigation funding information to the extent it related to the value of the patents at issue:
I'll grant the request in part for additional testimony, to the extent that the questions have some tie to the subject matter of communications with actual or potential investors and/or actual or potential litigation funders regarding the value of the patents at issue in this litigation.
. . . That information can be pursued in a further deposition regarding the issue of communications with actual or potential investors or litigation funders, to the extent that the questions can be fairly said to get to discussions about the value of the intellectual property at issue in this case.
I think that if such communications were had, the defendant has -- demonstrated why it could bear on and be relevant at least to the issue of damages, the reasons they've set out in their papers.
I understand the case law that writ large in all circumstances, you know, courts are hesitant to suggest that all or any discovery about litigation funding, for example, is necessarily fair game.
But I think under the circumstances of this particular case, particularly, we have a plaintiff who I think at least it's undisputed that their primary business, if not a sole business for many of the years in question, has been focused on licensing and litigating patents. It's a fair inference that in meetings with actual or potential investors or litigation funders, that there may well have been discussions that bear in some way on the value of the intellectual property at issue in this case. And that kind of subject matter does seem like it could be relevant, at a minimum, to the issue of damages.
It could also potentially be relevant to other liability issues in the case, but at a minimum, the damages as well. I think that it is fair game for Defendant to be able to ask those questions.
Relatedly, to the extent that I, with regard to a privilege log dispute, am asked to review certain documents that were logged because they implicate communications about litigation funding. I think it would be appropriate for those kind of communications to be produced if they relate to the subject matter that I've just described. That is communications about the value of the IP in this case.
Id., D.I. 342 at 155-157. That's certainly something to consider, both when communicating with potential litigation funders and when crafting discovery requests to get at those communications.
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