September 19, 2021

Volume XI, Number 262

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September 17, 2021

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No Fishing Allowed: Discovery of Litigation Funding Requires Articulation of Relevance Beyond Speculation

A recent Memorandum Order from the District of Delaware edified the protections courts tend to give discovery concerning litigation funding. Because Defendant AT&T failed to carry its burden of demonstrating the specific relevancy of litigation funding-related information, the Court declined to compel its disclosure. We previously discussed an opinion out of the Northern District of California denying defendants’ motion to compel discovery as to potential litigation funding allegedly considered by plaintiff; this is yet another decision rejecting defendants’ efforts to uncover documents and communications related to litigation funding.

By way of background, Defendant AT&T sought to compel discovery of communications between Plaintiff UAT and third parties related to potential investment by those third parties in UAT’s lawsuits and “quarterly updates” about UAT’s current lawsuit. Judge Stark denied AT&T’s motion to compel, concluding that AT&T “has failed to meet the threshold requirement to show that the litigation funding-related discovery it seeks here is relevant.” In particular, AT&T “merely speculates” the relevancy without articulating how documents within the scope of the discovery requests at issue are “relevant to the specific claims or defenses of this case.” Notably, the Court reviewed the documents submitted by UAT for in camera review—but did not find them to be relevant to any issue in the case.

This decision follows the recent trend of courts favoring only limited discovery into documents and communications related to litigation funding due to their tenuous relevance to issues in litigation—often there is no relevant purpose for such discovery, other than to place extra burdens on patent owners and third party funding sources.  In cases where litigation funding discovery actually bears on issues in the case, the door is still open for defendants to articulate that reasoning, beyond mere speculation, and pursue discovery.  But some industry observers will see this decision as progress in overcoming at least one of the tools in the efficient infringement tool box and moving toward courts focusing on the merits of patent infringement cases.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 170
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About this Author

Michael Renaud IP Litgation Attorney Mintz Levin
Member / Chair, Intellectual Property Division

Michael is a highly regarded intellectual property litigator and patent strategist who helps clients protect and generate revenue from their patent holdings. Intellectual Asset Magazine has repeatedly recognized him in its select IAM Patent 1000 and IAM Patent Strategy 300 publications. Clients rely on his counsel regarding sensitive licensing agreement negotiations, acquisitions, and other technology transactions. He leads a team known for its ability to translate complex technology and its value to non-technical professionals — in court and business negotiations.

Michael is...

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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
Member

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...

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Daniel B. Weinger Patent Litigation Attorney Mintz Law Firm
Member

Daniel's practice in intellectual property focuses on patent litigation, both at the International Trade Commission and the Federal District Courts. Daniel has participated in all phases of patent litigation, including active engagement in multiple evidentiary hearings at the International Trade Commission. He has done work in a variety of technology areas, including computer software, software architecture, GPS, network devices, semiconductors, converged devices, and LED lighting.

Prior to joining Mintz Levin, Daniel worked as a database...

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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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