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Discovery Concerning Potential Litigation Funding is Not Relevant or Proportional

A recent order from the Northern District of California provides some succinct guidance on the relevancy of discovery concerning litigation funding. In Space Data Corp. v. Google LLC, 5-16-cv-03260, the court denied Defendants Google and Alphabet’s motion to compel discovery as to potential litigation funding allegedly considered by Plaintiff Space Data.

Space Data sued Google and its patent company Alphabet over Google’s Project Loon – an Internet-beaming balloon initiative. Space Data alleged that Google unlawfully used confidential information and trade secrets disclosed during their partnership discussion in 2007 and claimed that Google infringed three of Space Data’s U.S. patents.

In a motion to compel discovery as to litigation funding considered by Space Data, the defendants moved to compel the production of Space Data’s Board minutes that discuss potential funding and the completion of a deposition of a Board member who had declined to answer questions related to the potential funding. The court denied the motion to compel because the defendants failed to establish how the requested materials were “relevant to any party’s claim” or “proportional to the needs of the case.” Although Space Data proffered that it did not have any third-party litigation financing in this case, the court went further and suggested that even if litigation funding were relevant, “potential litigation funding is a side issue at best.” The court also concluded that “there is much discovery that would be more important in resolving the merits of this case. And the burden of responding would outweigh its likely benefit to defendants.”

While this decision provides some welcome insight regarding the relevancy of information pertaining to potential litigation funding, it is unclear from the court’s very short opinion whether and how information pertaining to funding would be relevant were the plaintiff actually funded in this case. Unless unartful drafting of litigation funding agreements might result in real issues, such as challenges to standing on which we have written previously, practitioners should be mindful of the court’s conclusion here, namely that litigation effort is better spent elsewhere.

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About this Author

Michael T. Renaud, IP Litigation Attorney, Mintz Levin Law Firm
Member

Michael’s practice is focused on patent litigation and also includes licensing, patents, copyrights, trademarks or trade secrets, and other intellectual property matters. His work in patent litigation primarily involves technologies such as electromechanical systems, digital cameras, embedded microprocessors, telecommunications and network software, cellular phones, and e-commerce, among others. Michael has also advised clients in regards to patent portfolios and IP diligence, and has counseled venture capital funds on their IP assets and patent value.

Michael rejoins Mintz Levin...

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 Andrew H. DeVoogd Member Boston Mintz Patent Litigation Licensing & Technology Transactions International Trade Commission Strategic IP Monetization & Licensing Federal District Court IP Due Diligence
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Drew is an experienced patent litigator and trial attorney whose work encompasses a broad range of technologies. He regularly represents clients in high stakes International Trade Commission investigations involving some of the world's largest technology companies. He also litigates patent matters and other business disputes in federal district courts around the country, and advises clients in complex IP licensing and related transactions. Drew excels at helping clients make sense of nuanced legal issues while developing effective strategies to protect and leverage their intellectual property. 

Drew focuses his intellectual property practice in patent litigation, with an emphasis on Section 337 investigations in the International Trade Commission. Drew has participated in all phases of numerous ITC investigations involving some of the largest technology companies in the world. He has first-chair trial and strategy experience during multiple ITC evidentiary hearings, and regularly leads large litigation teams through fast-paced ITC investigations. Drew has also litigated patent infringement and trade secret cases and other complex business disputes in federal district courts across the country.  He has successfully argued on behalf of his clients during multiple Markman claim construction hearings, as well as on all manner of discovery, pretrial, and other motions, before the ITC and federal district courts.

In addition, Drew provides strategic counseling to help clients protect and leverage IP rights to maximize their value. Drew has participated in negotiating and closing numerous complex IP licensing and sale transactions, including elaborate multiparty agreements involving thousands of patents, as well as conducting pre-suit and transactional diligence relating to large portfolios of U.S. and foreign intellectual property assets. He also advises clients on trademark protection and related disputes.

Drew has worked in diverse technology areas such as embedded microprocessors, liquid crystal displays, graphics processors, consumer telecommunications systems, converged devices and related software and operating systems, mobile communications infrastructure, DDR4-compliant memory modules and their components, memory controllers, LED-based lighting systems, thermoplastics, electrical motors, and biochemical assays.

Drew is a member of the firm’s Pro Bono Committee. His own pro bono work includes representing asylum-seekers, as well as clients of the Mintz Domestic Violence Program in obtaining and extending 209A abuse prevention orders on behalf of victims of domestic violence and sexual assault, including on appeal.

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Catherine Xu Patent Attorney Mintz Levin
Associate

Catherine has an electrical engineering background and her experience includes patent litigation-related patent analysis.

Catherine was a Summer Associate at Mintz, and also interned in the Shanghai, China, office of another US law firm, where she created infringement analysis charts and conducted case research on US patent litigation involving Chinese LED manufacturers.

While in law school, she participated in the Journal of Science & Technology Law. As an undergraduate, she interned in the Department of Renewable Energy at Technische Universitat in Darmstadt,...

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