A Blog About Intellectual Property Litigation and the District of Delaware

Entries for tag: Mavexar

While we were on break, Judge Connolly issued an opinion in one of the lesser-covered, but most interesting, of the Mavexar suits.

Sandra Iglesias, Unsplash

Power Integrations, Inc. v. Waverly Licensing LLC, C.A. No. 22-1554-CFC (D. Del), is one of my favorite complaints ever. Waverly -- allegedly one of the Mavexar companies -- sued Power Integrations for infringement in Texas right before Judge Connolly held his first hearing in the Mavexar matters in November of 2022.

In a truly inspired move, Power integrations then filed a DJ complaint in Delaware (its state of incorporation) alleging that "Defendants have engaged in a broad and aggressive campaign to harass and threaten many companies, including Power Integrations, with assertions of patent infringement liability . . . ." Id. at D.I. 1. Notably, they managed to get this complaint on file by the end of November 2022.

The complaint is well worth a read, but the best bit is definitely when they point out that Waverly's official address is actually an empty shelf in a Staples:

In an assignment filed with the U.S. Patent and Trademark Office for the ’246 patent, defendant Array IP LLC identified itself as having the same address that defendant Waverly Licensing LLC lists in the Waverly-PI complaint as its principal place of business (3333 Preston Road, Suite 300, Frisco, Texas 75034). (Id.) However, that address is actually a Staples store . . . Moreover, the specific box number that defendant Waverly occasionally lists in its court filings as its “principal place of business” within that “suite” is an open shelf.

Id. at paragraphs 12-13.

There are pictures and everything, it's really great.

This complaint prompted all of the DJ defendants -- which included Waverly, Mavexar itself, and several others -- to ...

Here you can see Mavexar, IP Edge, and their counsel after yesterday's opinion.
Here you can see Mavexar, IP Edge, and their counsel after yesterday's opinion. Mae Mu, Unsplash

Wow! Today, in the Mavexar cases, Chief Judge Connolly issued a huge, 102-page opinion referring plaintiffs' counsel to the Texas Supreme Court's Unauthorized Practice of Law Committee, the PTO, and the Department of Justice to determine whether counsel violated various rules—or federal laws:

As it appears that [three Mavexar employees] engaged in the unauthorized practice of law, I will refer them to the Texas Supreme Court's Unauthorized Practice of Law Committee.
* * *
I believe it appropriate to bring these matters to the attention of the PTO and the Department of Justice to allow them to conduct further inquiry into whether the PTO's rules or [18 U.S.C.] § 1001 were violated. The Department may also deem it appropriate to investigate whether the strategy employed by IP Edge to hide from the defendants in these cases and the Court real parties in interest, including France Brevets, violated any federal laws.

Nimitz Technologies LLC, v. CNET Media, Inc., C.A. No. 21-1247-CFC, D.I. 34 at 98, 100 (D. Del. Nov. 27, 2023).

If you're not familiar with them, Mavexar appears to be an entity that recruits people to serve as the sole members of shell LLCs that assert patents. The recruited individuals may not fully understand what is going on, and may get something like 5-10% of the proceeds of the patent infringement suits in exchange for accepting all of the risk. It looks like Mavexar sets up the entities, hires the attorneys, and does the work of selecting targets and even drafting claim charts.

The opinion goes through exactly what these entities and attorneys did—at least, as far as the Court can tell from the factual record and their production, which was apparently full of holes.

In short, the attorneys acted as if they were attorneys for Mavexar and IP edge rather than their nominal clients (the LLCs asserting the patents). They generally didn't communicate with their clients until Chief Judge Connolly started pressing them, which was months after they had been asserting and settling these cases.

Instead, the Court describes how they worked almost exclusively with Mavexar / IP Edge employees. Given that Mavexar ...

Just today Judge Connolly issued another opinion in the Mavexar cases, denying the motion by Backertop Licensing LLC's sole member to stay the Court's order sanctioning her for failure to appear for a hearing.

As you may recall, the witness initially attempted to appear via teleconference, citing financial concerns and responsibilities at home and at work. Judge Connolly denied the request, and she ultimately failed to appear for the hearing. Thus began a running fine of $200 per day (that the Court is open) until she appears.

AI-Generated, displayed with permission

Shortly thereafter, Backertop moved to stay enforcement of the order pending appeal. Judge Connolly denied that motion in a short opinion today noting that success on appeal was unlikely:

I think it unlikely that Backertop and Ms. LaPray will prevail in their appeal. Indeed, were Ms. LaPray's reading of Rule 45 to be adopted by the Federal Circuit, a resident of Hawaii (which is more than 100 miles from any other federal judicial district) could form a shell LLC, give the LLC no assets except for a questionable patent, assert the patent in frivolous infringement lawsuits filed under the LLC' s name in the other 93 federal judicial districts, and have the LLC engage in fraudulent and sanctionable conduct through the course of those suits with impunity

Backertop Licensing LLC v. Canary Connect, Inc., C.A. No. 22-572-CFC, D.I. 62 at 5-6 (D. Del. Oct 3, 2023)

Given the track record of Mavexar appeals so far, this seems a fair assessment.

And so the fine continues to pick up steam. By my count, it has currently been building for 31 taxable days. for a total of $6,200 smackeroos.

Given that state of affairs, I thought ...

Better $200/day than cell block 200, I suppose.
Better $200/day than cell block 200, I suppose. Kenny Eliason, Unsplash

When we last wrote about Mavexar, Chief Judge Connolly had held a civil contempt hearing after he ordered the sole member of Backertop, a Mavexar-related LLC, to appear in-person in Delaware and she failed to appear (she instead initiated a head-on challenge to the authority of the Court). She likewise failed to appear for her contempt hearing.

Today, the Court issued its opinion and order, holding the witness in contempt. It handily dispatched with each of the witness' arguments against the hearing.

It easily rejected their first argument—that the Court lacks jurisdiction after the entity, Backertop Licensing LLC, dismissed it's complaint. The Court reiterated the same ruling it made last time.

Next, the Court easily rejected the idea that civil contempt is "meant to benefit the complainant," citing multiple U.S. Supreme Court opinions to the contrary. It also rejected the idea that a party can re-litigate the underlying order in context of a contempt proceeding.

I found the Court's discussion of the alleged Fifth Amendment violation interesting, particularly when the Court attempts to identify exactly which Fifth Amendment right it could possibly have ...

Crab in Net
Andrew Russell, displayed with permission

We're back! Our trial was a success, Nate is back from his travels, and things have cooled down enough for us to resume regular posts this week.

While we were tied up, there was some progress in the Mavexar cases. If you recall, Chief Judge Connolly had ordered the sole member of Backertop, a Mavexar-related LLC, to appear in-person in Delaware to answer for the entities' potential fraud on the Court. She objected, stating that she would not appear.

Since then, the July 20 hearing occurred, and as promised she did not appear—although her counsel, and counsel for Backertop, did show up. The transcript for that hearing is below.

The Court discussed the production …

Come At Me Bro Crab
chanphoto, Unsplash

As I mentioned on Monday, my co-bloggers Nate, Emily, and I are swamped at the moment, with a trial this week and another coming up in a week and a half—so this will be a less fulsome post than I'd like.

But I wanted to pass along the "Notice of Objection to and Non-Participation in Judicial Inquisition" attached below, in which the Mavexar-related entity Backertop Licensing LLC and its owner refuse to appear for the Court's scheduled July 20, 2023 hearing (and to produce any further documents), in direct contravention of an order of the Court:

Former Plaintiff Backertop Licensing LLC (“Backertop” or “Plaintiff”) hereby gives …

Dino Reichmuth, Unsplash

We wrote last month about the "mansplaining brief," which caught some eyes around town when it (and the declaration attached to it) accused the Court of "gender harassment and discrimination."

We set out the full background in our post, but generally the Court ordered the sole member of a Mavexar-related LLC to attend a hearing here in Delaware.

She then filed a motion for reconsideration offering numerous objections, including among other things that (1) the Court had no power under FRCP 45 to compel her attendance, since she lives in Texas; and (2) that she is a working mother and therefore unable to travel to Delaware.

(She also said that she "feels harassed" by …

Hercules Slaying the Hydra

Judge Connolly’s new order provides a concise summary of the Mavexar timeline and announced the date of a long-delayed evidentiary hearing in the Creekview case.

Mark your calendars for Friday, 7/21 at 9:00AM in Courtroom 4B. This hearing was originally slated for December 6, 2022, but it never happened.

Last fall, Judge Connolly ordered a series of evidentiary hearings in approximately a dozen cases to determine whether LLC plaintiffs had complied with his standing order.

According to the Court in his newest order, the first hearing in that series, involving Nimitz, Mellaconic, and Lamplight:

raised serious concerns that the parties may have made inaccurate statements in filings with the Court; that counsel, including Mr. Chong, may have …

"Sure, I had my LLC sue a bunch of people in Delaware, but I didn't think the Court would actually make me GO there." Andrew Russell, CC BY 2.0

I guess our post about the Mavexar hearing last week was remiss in failing to talk about the "mansplaining brief." I've had a couple of people ask me about it. Here is the background and some quick thoughts.

Chief Judge Connolly Orders Mavexar-LLC's Sole Member to Testify In Person

The short version of the leadup: Mavexar is an entity that creates LLCs to assert patents against tech companies for quick settlements, often in Delaware. The LLCs take all of the risk, and Mavexar keeps 90-95% of the profits while hiding its …

Backertop's—or Mavexar's—Two Attorneys
Backertop's—or Mavexar's—Two Attorneys AI Generated

The Court held a lengthy hearing in the Backertop cases today. These are Mavexar-related actions and, if you recall, they involve a Mavexar attorney and his wife, who he appointed as the sole member of a Mavexar patent assertion entity.

How a Patent Assertion Entity is Born

Some of the Court's questions focused on exactly what Mavexar does, and confirmed that they operate basically as set out in the earlier hearings.

Here, from the lawyer's perspective, Mavexar attorneys reached out and said that Mavexar wanted to start several litigation campaigns, and asked whether the attorney was interested. They said that they would figure out what entity would actually assert the patents later.

In …