In its order on a mandamus request filed by MAVEXAR-linked entity Nimitz Technologies LLC, the Federal CircuitSee CAFC has temporarily paused Judge Connolly’s order that entities in his court disclose details of any third-party litigation funding arrangements.
If you haven’t been following these cases, Judge Connolly issued a standing order requiring certain disclosures from parties in his court. This led to some fireworks over the past few weeks, as putative owners of patent assertion entities that have filed suits in his court were called to testify. One testified that she hadn’t spoken with her LLC’s attorneys at all prior to the filing of the case—although she’s married to a MAVEXAR attorney; another is a food truck owner who testified that he was approached about a “passive income” opportunity and that he didn’t know who had set up his LLC.
And then there’s Nimitz. Nimitz is run by a full-time sales person, who was approached by MAVEXAR with a similar opportunity and filed incorporation paperwork listing a P.O. Box. He had no involvement with the patent-in-suit, and was not represented by a lawyer in this transaction.
So, who is MAVEXAR? Well, they seem to be associated with IP Edge, an assertion entity linked to thousands of cases filed by hundreds of entities incorporated with similar structures to those in the Delaware cases.
Small surprise that Judge Connolly implemented a standing order requiring disclosureOne of the primary objectives of the patent system. In return for the government-granted right to exclude that is embodied in the patent, the inventor must disclose to the public through his patent the invention for which protection is sought. Inventors unwilling to disclose their invention to the public may instead opt for trade secret protection. of these sorts of background arrangements!
Especially because—as the excellent IP/DE blog noted in one of its articles on these hearings—this is something only a judge could do. A party trying to investigate this sort of information would be stymied by various procedural roadblocks; it’s much harder to tell the judge who you’re in front of that you won’t provide them with that information. But it’s also information that’s of particular relevance to a judge, who has to ensure that they don’t face conflict-of-interest claims down the road. They also might need this information in order to make sure that a plaintiff who misbehaved in one case isn’t escaping liability by hiding behind a series of allegedly unrelated shell companies. It could also be relevant to ensuring that the right parties are joined to a case—after all, if the assignees lack sufficient control over the litigation, then they might not actually own the patent and MAVEXAR might have to join the case in order to assert its patents.
That brings us to this week’s order pausing Judge Connolly’s order while the Federal CircuitSee CAFC is briefed. Perhaps unsurprisingly, Nimitz—or maybe MAVEXAR, given the testimony in front of Judge Connolly about who controls litigation—is trying to get out of disclosing its backers by complaining to the Federal CircuitSee CAFC that it’s being asked about who funds and controls its litigation strategy.
The real question is: what is Nimitz and MAVEXAR trying to hide?
