Northern District of Texas Blog

On October 20, 2020, the Southern District of California issued an order in Impact Engine, Inc. v. Google LLC (available here). In the order, Judge Bencivengo found that a litigation-funding agreement and related materials were protected from discovery under the work-product privilege: “It is clear these documents were created because of the litigation they will fund. . . . In this case, disclosure of the litigation funding agreement, including the preparatory materials, to the litigation funder, a party to the agreements, did not substantially increase the opportunity for Google, Impact Engine’s litigation adversary, to obtain the agreements. The documents reviewed by the Court included confidentiality provisions regarding the agreements, the terms and the information related to them.”

On October 2, 2020, the PTAB issued a key decision in RPX Corporation v. Applications in Internet Time, LLC (available here) finding that Salesforce was a real party in interest to an RPX inter partes review (and, as such, declining to institute RPX’s IPR because RPX filed it after Salesforce’s 1-year bar date). It is a fact specific decision (with the gist being that RPX was acting on behalf of its member Salesforce in filing the IPR), but patent owners will use the decision to argue that any IPR filed by RPX or Unified Patents should not be instituted unless all of their members are listed as real parties in interest (or, at a minimum, any member presently in litigation concerning the patent-at-issue is not listed as a real party in interest). The decision may also spell trouble for any IPR filed by RPX or Unified Patents 1 year after a complaint asserting the patent-at-issue has been served on any of their members. It will be interesting to see how, if at all, RPX and Unified Patents change their business models in view of the decision and how their members will react to the decision. All things considered, a favorable decision for patent owners faced with potential IPRs from RPX and Unified Patents, as it provides a potential avenue to have the IPR denied. 

On October 1, 2020, the District of Delaware’s Magistrate Judge Burke issued an oral order in Red Hat, Inc. v. Sequoia Technology, LLC (available here). Magistrate Judge Burke held that it is improper to instruct a witness not to answer questions regarding litigation funding based on a relevance objection—“it is not proper to instruct a witness not to answer deposition questions on relevance grounds[.]” The Court allowed a new deposition where Defendant “may re-ask such questions and have them answered.”

On September 16, 2020, the Eastern District of Pennsylvania issued a decision in Midwest Athletics & Sports Alliance LLC v. Ricoh USA, Inc. (available here). The decision finds litigation-funding materials discoverable, and rejected a common-interest privilege argument. It further finds that disclosure of privileged materials to a funder waives privilege. A work-product argument was rejected because the “documents [at issue] [were] transactional” even if the “documents have some indirect connection to litigation because [plaintiff] was formed in order to monetize patents through litigation.” The court held that valuation documents shared with potential funders are (i) relevant to damages and (ii) not privileged (because they were shared). Bottom line: the law concerning discovery of litigation funding materials/communications remains in flux.