The plaintiff in Arthrex, Inc. v. Nat'l Union Fire Insurance Co. of Pittsburgh, PA , C.A. No. 22-465 (D. Del. Nov. 8, 2022), was a Delaware entity, headquartered elsewhere and none of the defendants had any particular Delaware connection. As is often the case in a patent action, the facts of the dispute …
Shortly after today's hearing regarding compliance with Chief Judge Connolly's standing orders, the Court issued orders in each of the cases from the similar hearing last week, requiring production of a broad range of communications among the plaintiffs, Mavexar, and their attorneys.
The Court issued similar orders in each case, each setting forth the Court's concerns:
Whereas the testimony of witnesses and representations of counsel at the November 4, 2022 hearing give rise to concerns that include but are not limited to the accuracy of statements in filings made by [each plaintiff] with the Court and whether the real parties in interest are before the Court;
"This is how I'm going to explain to my wife why she should have an LLC that holds our company's patents."AI-Generated, displayed with permission
Chief Judge Connolly held another hearing today regarding compliance with his standing orders on litigation funding, this time exploring the relationship between NPE plaintiff Backertop Licensing LLC and MAVEXAR, the entity that is said to have created Backertop.
Last week's hearing involved testimony from a sales person and a restaurateur who owns a food truck, each of whom had been recruited by MAVEXAR to be the sole member of a patent assertion NPE, as an "investment" opportunity or a way to make "passive income."
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We've had an ongoing series of posts about the remarkable hearing that Chief Judge Connolly held last week regarding litigation funding.
I wanted to post a heads up that another hearing on that topic in the Backertop cases, C.A. Nos. 22-572 and 22-573, is set for Thursday 11/10 at 10:00 am in Courtroom 4b. So far, based on the docket, it looks like the hearing is likely to go forward.
Unlike Friday's hearing, tomorrow's involves only two related cases, and likely a single witness. But it may still be worth stopping in if you are regularly involved in these kinds of NPE cases.
I thought I'd share an old transcript that has come in handy a number of times since it issued back in2013, where Judge Andrews made a helpful ruling about how and when patentees must respond to conception date interrogatories—an issue that comes up frequently.
In Vehicle Interface Techs., LLC v. Jaguar Land Rover N. Am., LLC, C.A. No. 12-1285-RGA (D. Del.), the defendant filed a discovery dispute to compel a full response to an interrogatory asking for the date of conception and reduction to practice.
The patentee had responded, but the answer was not very helpful. According to the discovery dispute letter:
[The patentee] stated that the sole inventor . . …
The plaintiff always wants to leave the door open. If they uncover new claims in discovery, they want to be able to add them in all the way up to trial. Defendants, of course, want to slam the door shut and wedge a dresser in front of it.
Whence Amendment?
The usual compromise is a deadline to amend the pleadings, which is included on all of our Judges' form scheduling orders. Interestingly, none of the orders specify when this deadline should fall, and in practice it varies widely. Looking at five recent orders I happen to have on hand, two had dates between the deadline for …
A lot of people are interested in Chief Judge Connolly's Friday hearing about litigation funding. Here is a chart of this blog's traffic for its entire existence through this weekend:
And here is a chart for that same period of time, plus one day—the day we circulated the post about Friday’s hearing:
The Court clearly hit on an issue that people care about!
Why an Entity Like Mavexar Might Want to (Supposedly) Operate This Way
Watching some of the comments on yesterday's post, one of the questions that came up was why a patent assertion entity would be interested in giving away 5-10% of their settlement revenue to what seems to be a random person, in exchange for that person …
"What do you mean, I can't talk to the defendant risk-free for an indefinite period of time prior to bringing suit?"AI-Generated, displayed with permission
Often, patentees will file suit before ever talking to the accused infringers, for a number of reasons. First, obviously, that lets them control where suit is filed. If a patentee says the wrong things to an accused infringer prior to suit, they could inadvertently create declaratory judgment jurisdiction and the accused infringer could file in their home jurisdiction. Patentees don't want that.
Filing suit before speaking also shows that the patentee means business. They aren't just going to go away, and they are willing to pay at least the cost of drafting a complaint and the filing fee.
But there are other reasons as well, and today's ruling in TTI Consumer Power Tools, Inc. v. Lowe's Home Centers LLC, C.A. No. 22-673-CFC (D. Del.) shows one of them.
There, the patentee apparently reached out to the defendant long before it intended to file suit. It's not clear exactly how long before, but it was enough time for the future-defendant to inform the plaintiff of the prior art and to file a request for an ex parte reexamination, and for the PTO to grant that request—and then for six weeks to pass after that!
So it must have been no surprise to the patentee that the Court found that all of the stay factors favored a stay, and stayed the case. The theme of the patentee's arguments against a stay were that it shouldn't be penalized for taking time to resolve the issue without litigation—but the Court disagreed ...
I flagged on Wednesday that Chief Judge Connolly planned to hold an evidentiary hearing today regarding compliance with his litigation funding and entity ownership orders in three cases. Well, I went, and it was one of the most remarkable hearings I've seen in a patent case.
The purpose of the hearing was to dig into whether the parties complied with Chief Judge Connolly's standing orders regarding litigation funding and entity ownership.
But the Court's statements at the hearing offered some insight into what motivated those orders in the first place: Chief Judge Connolly believes (as he has said before) that the District Court is not a "star chamber," and that the public has …
One thing I noticed, but failed to mention, in discussing Judge Williams' opinion in Cirba IP, Inc. v. VMware, Inc., C.A. No. 19-742-GBW, week was the following passage on footnotes in briefing:
[T]he Court ultimately needs not address this footnote argument because "arguments raised in passing (such as, in a footnote), but not squarely argued, are considered waived. "
Cirba, at 4 n.3 (quoting Samsung Elecs. Co. v. Netlist, Inc. , C.A. No. 21-1453-RGA, 2022 WL 3027312, at *5 (D. Del. Aug. 1, 2022))
This is a policy we've touched on occasionally on the blog, most notably from Judge Andrews.
Where it gets interesting, is that Judge Williams issued another order with …
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