A Blog About Intellectual Property Litigation and the District of Delaware

Entries for tag: FRCP 7.1

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:

Blog Traffic Through Nov. 6 2022

And here is a chart for that same period of time, plus one day—the day we circulated the post about Friday’s hearing:

Blog Traffic Through Nov. 7 2022

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 …

Under Rock
AI-Generated, displayed with permission


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 …

These patent plaintiffs may have rough seas ahead.

It seems there has been a lot of interest in Chief Judge Connolly's evidentiary hearings about compliance with his standing orders regarding disclosure of litigation funding and entity ownership, which are now scheduled in over 20 cases.

I've had a few questions about when the hearings are going forward, so here is an update.

Here Is When the Hearings Are Scheduled

Here is when the hearings are set for, at least as of today:

  • Friday, November 4, 2022, at 10 am in Courtroom 4B: Cases involving Mellaconic IP, Lamplight Licensing LLC, and Nimitz Technologies LLC are set for hearings regarding compliance with the Court's third-party litigation funding order. See C.A. Nos. 22-244, 22-541, 22-418, 22-1017, 21-1247, 21-1362, 21-1855, …

Get your popcorn ready...
Linus Mimietz, Unsplash

We've talked a lot about Chief Judge Connolly's standing orders on disclosure and litigation compliance, including about how he recently ordered in-person hearings regarding compliance with those orders in a fairly large number of cases.

Chief Judge Connolly's standing order on Rule 7.1 statements requires disclosure of all individual or corporate owners of certain entities, going all of the way up the chain and including indirect owners:

[I]n all cases assigned to Judge Connolly where a party is a nongovemmental joint venture, limited liability corporation, partnership, or limited liability partnership, that the party must include in its disclosure statement filed pursuant to Federal Rule of Civil Procedure 7.1 the name of every owner, member, and partner of the party, proceeding up the chain of ownership until the name of every individual and corporation with a direct or indirect interest in the party has been identified.

Standing Order Regarding Disclosure Statements Required by Federal Rule of Civil Procedure 7.1 (D. Del. April 18, 2022).

We wrote about one instance, in VLSI Technology LLC v. Intel Corporation, C.A. No. 19-426 (D. Del.), where the Court ordered the plaintiff to confirm compliance with its standing order, and stayed the case when the plaintiff filed an inadequate response.

Now we have an update

Bullet Holes
Mykola Makhlai, Unsplash

At this point it's clear that Chief Judge Connolly's standing orders regarding initial disclosures and litigation funding are no joke, and plaintiffs need to comply with them or risk consequences.

Today, the Court took the further step of requiring the owners of plaintiff entities in at least 14 cases to appear in-person for evidentiary hearings regarding compliance with his standing orders.

The orders today generally took the following form:

Whereas the amended corporate disclosure forms Plaintiff filed in the above-captioned cases identify [owner name(s)] as Plaintiff s owner; and
Whereas the Court has concerns about whether Plaintiff has complied with the Court's standing order regarding third-paty litigation funding [or about the accuracy of the …

IP Edge? Is that you?
IP Edge? Is that you? Ahmed Zayan, Unsplash

We've talked a lot about Judge Connolly's April 2022 standing orders on disclosure statements and litigation funding, including earlier this month when we Judge Connolly stayed an action after a plaintiff failed to fully comply with those orders.

(Plaintiff in that action, by the way, filed an updated disclosure statement claiming it has no knowledge to disclose—we'll have to see how the Court responds to that).

Yesterday, it happened again, but it was triggered by a clever filing by a defendant. In Longbeam Technologies LLC v. Amazon.com, Inc., C.A. No. 21-1559-CFC (D. Del.), the Court put an order on the docket for the parties to comply with its standing orders:

ORAL ORDER: The parties are directed to certify within five days that they have complied with Chief Judge Connolly's April 18, 2022 Standing Order Regarding Disclosure Statements Required by Federal Rule of Civil Procedure 7.1. The parties are also reminded of their obligation to comply with Chief Judge Connolly's April 18, 2022 Standing Order Regarding Third-Party Funding Arrangements. Ordered by Judge Colm F. Connolly on 5/13/2022. (nmf) (Entered: 05/13/2022)

In response, plaintiff filed an updated Rule 7.1 statement but, as far as I can tell, no litigation funding

Hatchet on Log
Andrew E. Russell, CC BY 2.0

We posted earlier this year about Judge Connolly's new standing orders requiring plaintiffs to disclose litigation funding and Rule 7.1 disclosure requirements for certain entities such as LLCs.

In that post, we pointed out that "the language seems to apply to existing cases, but there is no explicit deadline for compliance. Personally, though, I'd probably get moving..."

Apparently, counsel for the parties in VLSI Technology LLC v. Intel Corporation, C.A. No. 18-966 (D. Del.) do not read the blog.

About two weeks ago, the Court issued oral orders in VLSI directing the parties to comply with his standing orders:

ORAL ORDER: It is HEREBY ORDERED that each party shall …

Standing Stones
Andreas Brunn, Unsplash

Today, Judge Connolly issued four new standing orders. These orders include:

  1. A requirement to disclose third-party litigation funding arrangements on the docket;
  2. A requirement in diversity cases to disclose the name and citizenship of every individual and corporation with a direct or indirect interest in every party;
  3. An order expanding disclosure requirements under Federal Rule of Civil Procedure 7.1 for non-governmental joint ventures, LLCs, partnerships, and LLPs;
  4. A requirement for the defendant in ANDA cases where there was a Paragraph IV certification to produce the ANDA when responding to the complaint;

The above are numbered only for reference below.

Each of these orders explicitly applies only in Chief Judge Connolly cases.

Order 1: Litigation …